Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — TRADE AND INDUSTRY

Director General of Fair Trading (Referrals)

Miss Boothroyd: asked the Secretary of State for Trade and Industry on how many occasions he has made referrals to the Director General of Fair Trading in accordance with section 13 of the Competition Act.

The Under-Secretary of State for Trade and Industry (Mr. Alexander Fletcher): Section 13 of the Competition Act 1980 has not yet been used.

Miss Boothroyd: Is the Minister aware that since his party assumed Government the price of petrol has been increased by £1 a gallon and that each year consumers are now paying £500 million in standing charges alone to the gas and electricity industries? Is he further aware that those matters are of great public concern? Why does he not act on behalf of the public and use the powers at his disposal by referring those massive price increases to the Director General of Fair Trading for investigation?

Mr. Fletcher: I do not think that there are any grounds for referral of the matters which the hon. Lady suggested, certainly not under section 13, which is held in reserve for specific cases of abuse.

Mr. Maples: While my hon. Friend is considering matters that have been referred to the Office of Fair Trading, will he consider the outstanding action against the Stock Exchange? Can he confirm that any settlement of that action will deal at least with the points raised by the Director General of Fair Trading over minimum commissions, broker-jobber relationships and membership restrictions? Can he confirm his Department's understanding that any settlement not dealing with those matters, while it might be popular with the stockbrokers, will not be popular with anyone else, including the great body of City opinion?

Mr. Fletcher: I understand my hon. Friend's interest in those matters, but I hope he will forgive me if I suggest that he waits until later, when my right hon. Friend the Secretary of State hopes to make a statement.

Mr. Janner: Nevertheless, is it not right that there are two ways to kill off an organisation? One is by destroying its credibility by over-ruling its wishes, and the other, as in the Minister's answer to the question, is by not referring anything to it at all. Is it his intention to destroy the Office of Fair Trading? Is he proposing to close it down?

Mr. Fletcher: There is, no justification for the hon. and learned Gentleman's remarks.

Management Skills and Training

Mr. Bowen Wells: asked the Secretary of State for Trade and Industry if he will take steps to improve the level of management skills and training, particularly in small businesses.

The Under-Secretary of State for Trade and Industry (Mr. David Trippier): My Department operates schemes providing management advice of various types, particularly for small firms, which also benefit from schemes directed at extending the knowledge and use of new technologies. We shall continue to keep our arrangements under review.

Mr. Wells: Does my hon. Friend agree that training in small business management can be carried out in two areas —first, formally, within colleges—I welcome my hon. Friend's reply to me today—and, secondly, through the creation of on-the-job training by local enterprise agencies and others? Small business managers need great support during this period, and training on the job. Will my hon. Friend make certain that that happens when he carries out his duties as the Minister responsible for small businesses?

Mr. Trippier: As I have already said, much assistance is already being given and we are prepared to consider extensions. We are considering whether to introduce a scheme to help in marketing. I think that my hon. Friend is right. Local enterprise agencies can play an important role in management training. I recently had the opportunity to visit the London Enterprise Agency and was very impressed by the excellent work that it is doing. We should encourage more local education authorities to become involved.

Mr. Bob Edwards: Is the Minister aware that the most important development in Britain today is the worker co-operative, the number of which has increased in six years from 20 to 700 registered under the Industrial Common Ownership Act 1976? When we refer to small firms, why is no attention given to that important development? There is a dreadful shortage of funds. A little expenditure on the industrial co-operative movement would further the new developments very much. Will the Minister give more attention to that matter?

Mr. Trippier: I am conducting a review of the Co-operative Development Agency. It is too early to speculate on the outcome of that review.

Small Businesses

Mr. Colvin: asked the Secretary of State for Trade and Industry if he is preparing any new proposals to help small businesses.

The Secretary of State for Trade and Industry (Mr. Cecil Parkinson): I am considering the need for measures to help small businesses. I believe that the priorities now are to ensure that those who run or wish to start small businesses are fully aware of the many schemes which have been introduced already and to reduce the administrative and legislative burdens on them.

Mr. Colvin: Is my right hon. Friend aware of the debt that the House owes to the former Member for Upminster,


Mr. John Loveridge, for all that he did to help formulate the Government's policy on small businesses? Has my right hon. Friend read the 40-point agenda for action which represents the unfinished business of the small businesses committee? Can he comment on the proposal to bring the development commission and COSIRA within his responsibility rather than that of the Department of the Environment?

Mr. Parkinson: I join my hon. Friend in his remarks about John Loveridge, who did a tremendous amount of work on this subject. The merger of COSIRA and the small businesses division has been considered. They have slightly different objectives. COSIRA is in the business of stimulating industry in rural areas. There is an overlap, but not a total identity. There has been a pilot scheme and we are considering its results. I think that there is some promise of better co-operation in this area.

Mr. Hardy: Can the Minister say how many of today's small businesses were large or medium-sized businesses five years ago?

Mr. Parkinson: I cannot answer that question, as the hon. Gentleman knows. I know, however, that if many large businesses had not become smaller they would not have survived. Now that they are smaller and better they have the prospect of growth, where before there was the prospect of death.

Mr. Grylls: When my right hon. Friend considers new measures, will he examine how Government procurement affects small businesses and see that measures are taken to ensure that they get a bigger proportion of the orders from central Government and local government? Will he start by ensuring that every Department keeps statistics of orders that go to small firms? That would at least be a beginning.

Mr. Parkinson: We are trying to ensure that small businesses have a chance to tender for and obtain a share of the vast public procurement programmes of the Government, despite allegations to the contrary from the Opposition.

Mr. Wrigglesworth: I recognise the contribution which the loan guarantee scheme makes to help small businesses, but is the Secretary of State aware that the ceiling limit gives rise to problems for some small businesses? Will he consider that? Will he also consider the way in which the banks administer the scheme, as there seems to be considerable variations between them? Will he consult clubs and institutions which represent small businesses, such as the Teesside small business club, to see whether the situation can be improved?

Mr. Parkinson: If the hon. Gentleman will forward to me any views that he has, or ask the Teesside business club to let me have its views, I shall be happy to consider them. Raising the limit is more a matter for my right hon. Friend the Chancellor of the Exchequer than for me, but I shall consider what the hon. Gentleman has said.

Sir Anthony Grant: Is my right hon. Friend aware that the best thing that the Government can do for small firms is to do absolutely nothing and to leave them alone? We must get the Government off their backs. If he could make the whole of Britain an enterprise zone, the better it would be for smaller firms and everybody else.

Mr. Parkinson: I admire my hon. Friend's confidence, but he, too, must have spoken at many political meetings at which the first question from the small business man is, "I do not want the Government to do anything, but what are the Government going to do for small busineses?"

Mr. Orme: Is not the confidence of the hon. Member for Cambridgeshire, South-West (Sir A. Grant) backed up by the fact that in 1982 there were 12,000 company liquidations in England and Wales, which is more than two and a half times the 1979 figure and the highest level ever recorded? When will the Government do something for small businesses, instead of putting forward cosmetic solutions as they are at present?

Mr. Parkinson: The right hon. Gentleman knows that accounts have two sides. On the debit side there were many liquidations, but on the credit side there were a great many more company formations. I wish that he would sometimes talk about that instead of constantly harping on the bad features of our economy.

Exports

Mr. Knox: asked the Secretary of State for Trade and Industry what was the value of British exports for the most recent 12-month period for which figures are available.

The Minister for Trade (Mr. Paul Channon): In the 12 months ended June 1983, exports amounted to £58,000 million.

Mr. Knox: What proportion of exports is attributable to the more realistic exchange rate that we have had since September 1982?

Mr. Channon: I am not in a position to quantify the effect of the exchange rate, but I think it is common ground in all parts of the House that the export figures represent a notable achievement by British exporters of which the House should be proud.

Miss Maynard: Is the Minister aware that for the first time in our industrial history we are importing more manufactured goods than we are exporting and that that is one of the achievements of the Government and of our membership of the Common Market? How do the Government propose to close the trade gap when North sea oil runs out?

Mr. Channon: The hon. Lady is not quite accurate. The stucture of the United Kingdom economy is naturally changing. We enjoy surpluses on our trade in oil and deficits on other commodities. It is important to recognise that demand for manufactures is growing in the United Kingdom this year. The output of manufacturing industry increased by 1 per cent. in the first quarter of 1983 and the May figure is the highest since October 1981.

Mr. Fallon: How many undertakings are in force by third countries on voluntary export restraints? Will my right hon. Friend place a summary of those undertakings in the Library?

Mr. Channon: If my hon. Friend will put down a question, I shall be happy to answer it.

Mr. Archer: Has the right hon. Gentleman noted that the pre-election optimism of the director general of the


CBI has changed to a scream for panic measures? Does he agree with the director general that when North sea oil begins to run out the country will definitely be in decline? If he does not agree, will he repudiate the director general's call for the alleged remedy, which is said to be the cutting of a further 360,000 jobs in the public sector?

Mr. Channon: Fortunately, my responsibilities do not extend to the provision of jobs in the public sector. It is important for the House to realize—I am sure that it does—that in the 12 months ending June this year the United Kingdom exported £38 billion worth of manufactured goods. The hon. Gentleman's ridiculous talk of collapse is therefore very premature.

Tourism

Mr. Adley: asked the Secretary of State for Trade and Industry if he will make a statement on his conclusions of the review of tourism's statutory bodies.

Mr. McCrindle: asked the Secretary of State for Trade and Industry when he will make his announcement on the review of tourism policy.

The Minister of State, Department of Trade and Industry (Mr. Norman Lamont): I am still studying the issues arising from the review. I hope to make decisions shortly and to make an announcement to the House after the recess.

Mr. Adley: My hon. Friend knows that I have an interest in the industry — [Interruption.] Knowing something about a subject is not necessarily a bar to asking a question. Is my hon. Friend aware that, as most people will agree, he is wise to study the matter for a little longer and to get it right rather than rush into a decision soon after assuming office? Does he accept that many people believe that the amendments tabled in Committee on what is now the Development of Tourism Act 1969 have largely been responsible for the conflict and duplication which have plagued the industry ever since? Will he give an assurance that he recognises the value of the British Tourist Authority and will do nothing to emasculate it?

Mr. Lamont: I am grateful to my hon. Friend for his understanding about the delay to the announcement on the review. I shall examine the issues that he has suggested concerning the 1969 Act. I shall also look into his latter point. I confirm that the tourist industry is a major growth industry and, above all, a major opportunity for more employment. The Government will do everything possible to encourage it.

Mr. McCrindle: While my hon. Friend is reaching his conclusions, would he care to comment on the widely circulated suggestion that there might be a case for a closer association between the British Tourist Authority and the English Tourist Board, perhaps with the former concentrating rather more than hitherto on outward tourism? Has he held any discussions with representatives of City institutions about the possibility of introducing private capital into tourist development?

Mr. Lamont: The answer to my hon Friend's second question is yes. Most tourist facilities ere financed with private capital. I cannot comment at this stage on my hon. Friend's first point, because it is the central issue in the review. However, it is widely agreed that there is an incredible amount of overlap in the present organisations and that we must think again about it.

Mr. Maxwell-Hyslop: Before my hon. Friend makes up his mind, will he consider the disproportionate allocation of public funds to Wales as opposed to the south-west, where unemployment is extremely high? Moreover, the south-west does not have the basic industries to provide employment on the same scale as Wales. Will my hon. Friend examine whether that distortion results from there being a separate Welsh Tourist Board, which receives far more than its fair share of resources as compared with different parts of England, all of which are covered by the English Tourist Board?

Mr. Lamont: I assure my hon. Friend that I shall consider that. There are grounds for anxiety about the lack of co-ordination between the different organisations. It is obvious that Scotland and Wales must co-ordinate their activities with the British effort as a whole. I believe that we should boost the regional tourist boards.

Mr. Bill Walker: When my hon. Friend conducts his review, will he bear in mind that there has recently been a substantial reorganisation of tourism and the tourist-related agencies in Scotland and that another change might not be beneficial to the industry?

Mr. Lamont: I shall bear that in mind. My hon. Friend is aware that there was a commitment in the Scottish Conservative manifesto about the organisation of tourism in Scotland.

Sir William Clark: Does my hon. Friend agree that the tourist industry is labour rather than capital-intensive? Will he have urgent talks with the Treasury to see whether more fiscal incentives can be given in the form of capital allowances for the tourist industry?

Mr. Lamont: I shall bear that point in mind. It is a long-standing issue and I well understand the industry's desire to have capital allowances to help with tourist projects.

Mr. Eastham: As we are considering tourism in general, can we prevail or the Minister to consider the problem of transport and the location of airports? Will the Minister use his good endeavours to get the appropriate Ministers to encourage the expansion and full utilisation of Manchester airport?

Mr. Lamont: I shall be talking to Ministers in the Department of Transport about the impact of their policies on tourism.

Mr. John Fraser: Does the Minister agree that, bearing in mind tourism's potential for earning foreign exchange and creating employment, expenditure to support tourism is well worth while? Will he reverse some of the more asinine decisions of his predecessor, such as that forcing the closure of the British Tourist Authority's public office at St. James's Street—an act which would be unthinkable in any other tourist country?

Mr. Lamont: That decision has been made. It was my hon. Friend's view that there was unnecessary overlap between that centre and statutory tourist boards. I agree with the hon. Gentleman's first point. Tourism is a big growth industry and we must do everything possible to encourage it.

Airbus A320

Mr. Wilkinson: asked the Secretary of State for Trade and Industry whether his Department has


participated in discussions between Rolls-Royce and Pratt and Whitney on a new engine to power the Airbus A320; and whether Government funding has been requested by Rolls-Royce to go ahead with this project.

Mr. Norman Lamont: The Department has kept in close touch with the general progress of these commercial discussions between Rolls-Royce, Pratt and Whitney and their Japanese, German and Italian partners. Rolls-Royce has, however, not yet submitted an application for Government funding towards its share of the project.

Mr. Wilkinson: May I make it absolutely clear that, if the Government want to maintain a substantial civil aircraft construction industry in Britain, they must provide launch aid for the A320? With regard to the power plant for that aircraft, is my hon. Friend aware that we are much more likely to get a Rolls-Pratt-Japanese power plant on the A320 if the British also participate in the construction of the airframe?

Mr. Lamont: I agree that the A320 is vital for the future of the civil aircraft industry in Britain. We have always made it clear that we are prepared to give launch aid for viable commercial projects. With regard to the engine, my hon. Friend knows that the proposed entry date for the A320 is 1988. It is unlikely that a Rolls-Royce engine will be available by then. We want there to be a Rolls-Royce engine on the A320 if that can be achieved.

Mr. Barry Jones: Is the Minister aware that the wings of the current airbus are made by aeroplane makers in my constituency and that that company is deeply worried by the lack of progress on the new airbus? Can he assure us that, notwithstanding the imminence of the large-scale expenditure cuts that are to be made this autumn, the required £400 million will remain safe and be available to British Aerospace? Are the Government giving more priority to the privatisation of British Airways than to the successful launch of the new airbus?

Mr. Lamont: We want a strong British civil aerospace industry. As the hon. Gentleman has just suggested, by mentioning the £400 million, huge sums of public money are involved in supporting the A320 and the engine for it.
It is right and proper for us to ensure that the projects are commercial. Indeed, we should be failing in our duty if we did not. We do not want political aircraft—we want good commercial propositions.

Mr. Hayward: Is my hon. Friend aware that anxiety is not confined to the constituency of the hon. Member for Alyn and Deeside (Mr. Jones), but affects the whole country? Is he further aware that the potential British share in the A320 could rise from 20 to 27 per cent.? Does he agree that that could mean that the anxiety would be removed and that there would be an opportunity for more jobs in many constituencies?

Mr. Lamont: I agree with my hon. Friend about our potential share rising from 20 to 27 per cent. In no way do I underestimate the importance of the project to British Aerospace and to jobs. As I have a large British Aerospace factory in my constituency the issue is strongly in my mind.

Mr. Orme: Does the Minister agree that there is growing anxiety about the need to develop the A320, from

the point of view of workers at British Aerospace and Rolls-Royce? Will he confirm, or deny, that the Government are not going ahead because of the proposed privatisation of British Airways?

Mr. Lamont: That has absolutely nothing to do with it. It does not come into the decision. The only reason why this is taking so long is that we want to be satisfied that the project makes sense. The right hon. Gentleman must be aware that the airline business is in considerable difficulties. Airbus Industrie has quite a few unsold A300s. That poses problems for British Aerospace. This decision must be taken cautiously and it must be the right one.

Manufactures (Statistics)

Mr. Bob Edwards: asked the Secretary of State for Trade and Industry what are the latest available 1983 figures for the United Kingdom's imports and exports of manufactures; and if he will make a statement.

Mr. Parkinson: In the first half of 1983 exports of manufactured goods were valued at £19·5 billion and imports at £20·9 billion. The growth of imports is evidence of increased industrial activity and of rising consumer demand at home, both of which offer increased opportunities for British industry.

Mr. Edwards: Is the Secretary of State aware that those figures are depressing, as it is the first time in 100 years that Britain exported fewer manufactures than it imported? Does he agree that we should not be cheerful about that? Is he aware that the Government's policies have depressed vast areas of the country and made areas such as the west midlands into industrial deserts? Is it not time that we had a change of Government policy? Although we all subscribe to international trade, should it not be fair trade and should we not have some control over imports to prevent the further depression of British industry?

Mr. Parkinson: During the first six months of this year, as my original answer showed, £19·5 billion worth of British manufactures went to markets all over the world. One reason why they can enter other markets is that we have a relatively open market. No one stands to gain from a trade war or from interfering with free trade. The idea that we should embark on an import control regime is completely mad, and we would be the big losers.

Mr. Marlow: Given the rebirth of British industry over the last four years — [Interruption.]— with massive improvements in productivity, can my right hon. Friend explain to me and to the House why there is such a yawning gap in our trade in manufactures with the European Community, which is now running at £6,000 million? What is the problem and what will he do about it?

Mr. Parkinson: The problem arises because more British people prefer to buy foreign goods than foreign people prefer to buy British goods. We shall solve that problem by producing better British goods at more competitive prices and by meeting the market's demands.

Dr. Bray: Will the Secretary of State undertake that no deal between the British Steel Corporation and US Steel for the export of slabs from Ravenscraig, at the cost of


closing the strip mills at Ravenscraig and Gartcosh, will be approved by the Government until the House has had a chance to debate the matter?

Mr. Parkinson: I said yesterday that negotiations were continuing, but I do not know when or whether they will reach a satisfactory conclusion. It is unlikely that they will be concluded during the recess, but I cannot be sure about that. I take note of what the hon. Gentleman says, but I hope he understands that I cannot give him an open-ended commitment such as he seeks.

Sir Kenneth Lewis: Does my right hon. Friend agree that the major problem for British manufacturing industry is that we have been importing manufactured goods from too many countries which put up barriers to stop the export of our goods to them?

Mr. Nicholas Winterton: Absolutely. Now answer that one.

Mr. Parkinson: That is a matter of opinion, but if my hon. Friend examines the textile industry—

Mr. Hoyle: Where is it?

Mr. Parkinson: —he will find a substantial measure of controls there. If he cares to examine our motor and footwear industries, and a range of other industries, he will find that it is possible to travel abroad and meet people who believe that we have many controls on their goods.

Mr. Hoyle: Will the Minister come into the real world and leave the cloisters of Tory Central Office? Does he not know that the Japanese and the French put up barriers? Every country protects its manufacturing industry, except this one, and is it not time that he did something for British industry?

Mr. Parkinson: To repeat the figure with which I started this round of questions, £19·5 billion worth of British manufactures went into other markets. They went there, according to the hon. Gentleman, over many barriers. Sadly, no country is a free trade purist any more, and Britain is no better or worse than the rest.

Mr. Dorrell: Do not the figures emphasise the great and continuing importance to Britain of its international trading relationships, and is it not remarkable that the Labour party seems to be determined to damage those trading relationships by engineering a breakdown of what remains of the free trading system?

Mr. Parkinson: My hon. Friend is right. We export a higher proportion of what we produce than any other major country. No other country is as dependent on access to other markets as we are, and part of the price that we pay for that is keeping our market as open as possible.

Dr. Cunningham: Is not the inescapable conclusion to be derived from the figures given by the Secretary of State that Britain faces a £1 billion def cit in trade in manufactured goods this year? How do the Government expect Britain to pay its way if that trend continues? What will they do to stop the persistent undermining of British jobs and British manufacturing?

Mr. Parkinson: The hon. Gentleman makes the simplistic assertion that we trade only in manufactured goods, but we do not. Britain is a huge exporter of services, and exports half as much again in services as it does in manufactures. Many highly paid jobs in Britain

depend on that. In our overall balance of payments last year we had a surplus of more than £3 billion, made up of a variety of components.

Employee Ownership Schemes

Mr. Ashdown: asked the Secretary of State for Trade and Industry what steps he now plans in order to implement the policy set out by him on 24 June, Official Report, c. 266, to continue to encourage employee ownership schemes in private industry.

Mr. Parkinson: My right hon. and learned Friend the Chancellor of the Exchequer has already taken important steps to encourage employee share ownership. Measures taken include significant improvements to the profit-sharing scheme arrangements, relief for savings-related share option schemes and relief for interest on money borrowed for investment in an employee-controlled company. In addition, a major benefit of privatisation is that employees are given a chance to own a stake in the business in which they work.

Mr. Ashdown: While giving a cautious welcome to that answer, especially as it builds on a Liberal party initiative in the Finance Act 1978, may I make it clear to the Minister that the Liberal party believes that he could go much further on this matter? Does he agree that share ownership schemes have a value that extends well beyond being used as a carrot for the privatisation of nationalised industries? Does he also agree—[HON. MEMBERS: "Too long".]—that, given the success of the share ownership scheme, it is possible to 'provide greater incentives for firms that wish to take advantage of the scheme?

Mr. Parkinson: I agree with much of the hon. Gentleman's rather long question. During our previous period in Government the number of employee share schemes increased from 30 to 600. In each of the past two years more than 250,000 additional people bought or acquired shares in the companies in which they worked. We have not gone as far as he and I wish, but we are moving firmly in the right direction.

Mr. Kenneth Carlisle: Despite the Government's achievement during the previous Parliament, does my right hon. Friend accept that tax relief for profit-sharing schemes is available in practice only for the employees of large companies? Will he urge the Chancellor of the Exchequer to reconsider methods that have been advanced of extending tax relief to the employees of small companies engaged in share schemes?

Mr. Parkinson: I assure my hon. Friend that I shall mention this matter to my right hon. Friend the Chancellor of the Exchequer.

Small Firms

Mr. Burt: asked the Secretary of State for Trade and Industry if he is satisfied with the outcome of the recent small firms publicity campaign.

Mr. Trippier: Yes. The recent small firms publicity campaign has generated more than 130,000 responses. I intend to analyse those responses further to show the extent to which the campaign has raised awareness of the assistance available, but I am satisfied with the level of interest generated.

Mr. Burt: Although the Government's attitude to small businesses, entrepreneurs and privately owned business generally is superior to the abuse and unconcern demonstrated over the years by the Labour party, does not my hon. Friend's answer show how necessary the publicity campaign was? What further publicity is planned?

Mr. Trippier: I agree with my hon. Friend that, in view of the importance of small firms to the economy, it was essential for them to use the resources available from the Government. There was clear evidence that comparatively few small business men or their professional advisers, such as accountants and solicitors, were aware of the many schemes available to help them, including loans and advisory services. I shall be considering my hon. Friend's latter point after analysing the response to the campaign, but I assure him that the booklet "How to Make Your Business Grow", which was one of the most successful publications to come out of a Government Department, will continue to be available.

Mr. Pavitt: Will the Minister take this opportunity to pay tribute to the Co-operative Development Agency, which successfully helped to set up 700 small cooperatives, mutually owned and controlled, while at the same time extending its influence across the country to the provision of services and productive enterprises? Will he assure the House that he will accept permanent responsibility for the continuation of the Co-operative Development Agency?

Mr. Trippier: The hon. Gentleman may perhaps have missed the point of the question of the hon. Member for Wolverhampton, South-East (Mr. Edwards), in reply to which I said that I was currently reviewing the CDA. It is too early at this stage to speculate on the outcome of that review.

Mr. Nicholas Winterton: Does my hon. Friend consider that the banking system has aided the Government in their campaign to help smaller businesses? Does he not share my concern that many banks have withdrawn support prematurely from many small firms, resulting in their liquidation and many redundancies? Does he not feel that, far from providing risk capital, banks are now concerned only about making more and more money by transferring money from one country to another, rather than investing in manufacturing industry which, in spite of what my right hon. Friend said, is the real creator of wealth?

Mr. Trippier: My hon. Friend will not be surprised to learn that I do not agree with him at all. Were it not for the clearing banks, we would not have received such assistance as has been given with the loan guarantee scheme, which so far has proved an enormous success.

Mr. Marland: asked the Secretary of State for Trade and Industry if he has plans to extend the small business service.

Mr. Trippier: We are just about to complete the strengthening of the small firms service in anticipation of the introduction of the enterprise allowance scheme nationwide on 1 August.

Mr. Marland: Is my hon. Friend aware of just how popular this service is among small businesses? Is he satisfied with the number of small business counsellors employed in the service, not only throughout the country but in the south-west of England especially?

Mr. Trippier: I am grateful to my hon. Friend for his kind remarks. I, too, congratulate the small firms service on its high standard of professionalism and excellent performance. Currently, the Department has 258 business counsellors under contract in England—32 in the southwest.

Mr. Batiste: Does my hon. Friend recognise the importance to small businesses of a high input of technical information? Will he therefore confirm the Government's intention to encourage the continuing development of links between the universities and small businesses? When does he expect to be able to respond to the report of the advisory committee on applied research and development?

Mr. Trippier: On my hon. Friend's last point, I understand that a reply is expected within the next three months. I fully support all that he said in his supplementary question.

Metrication

Mr. John Fraser: asked the Secretary of State for Trade and Industry if he will make a statement about progress towards metrication and its effect on trade abroad and within the United Kingdom.

Mr. Fletcher: It is the Government's firm belief that individual sectors of industry or organisations are best placed to decide on the benefits and the timing of the changeover. I am not aware of any evidence to suggest that the policy of voluntary metrication, which the Government have pursued over the past four years, has had any adverse effect on trade.

Mr. Fraser: Does not the Minister agree that it makes trading, industrial and educational sense to move gradually but certainly towards one system of weights and measures? For example, the system of selling petrol in one garage by the litre and in another by the gallon makes no long-term industrial or commercial sense. Surely it is the duty of a commercial Department to give a commercial lead.

Mr. Fletcher: I disagree with the hon: Gentleman, specifically on petrol and on the Government's duty to give a lead. The Government have facilitated the changeover to the metric system, but we believe that it should remain on a voluntary basis and that individual sectors of industry and consumers should have a strong say as to which system they operate.

Mr. Eldon Griffiths: Is my hon. Friend aware that many of the companies that make the machines that measure petrol or other products feel that they are handicapped by the Department being too slow in its certification of new machines and too expensive in the fees that it charges? In view of the severe competition that the weighing and scale machine industry is facing, will he consider the possibility of self-certification and privatisation?

Mr. Fletcher: I am grateful to my hon. Friend for raising both those points. I plan to visit one of our largest manufacturers of weighing equipment in the next few months, and I shall then learn more about the problems of the industry. I shall also take into account the points that my hon. Friend has raised.

Insolvency (Cork Committee Report)

Mr. Hanley: asked the Secretary of State for Trade and Industry what progress has been made in his review of the proposals in the Cork committee report; and whether he will make a statement.

Mr. Parkinson: Insolvency law generally has been under detailed scrutiny following publication of the report of the Insolvency Law Review Committee. Sir Kenneth Cork's committee has produced a thorough and weighty report. It deserves the most careful consideration. I am giving it high priority, but it is inevitably a lengthy process.

Mr. Hanley: Is my right hon. Friend aware that the reform of insolvency law is urgently required, particularly by small creditors, to redress the balance against the preferential creditors such as the state, that is the Inland Revenue and the local authorities—[HON. MEMBERS: "Reading."]—the banks, with their floating charges—[HON. MEMBERS: "Reading."]—

Mr. Willie W. Hamilton: Put it down.

Mr. Speaker: Order. These interruptions are unfair on a new Member.

Mr. Hanley: I thank you, Mr. Speaker, for your protection. Is my right hon. Friend also aware that a reform of insolvency law is urgently required, not only according to the ministerial statements prior to the general election, but according to insolvency practitioners and Sir Kenneth Cork?

Mr. Home Robertson: That was a maiden speech.

Mr. Parkinson: My hon. Friend is right. When I arrived back at the Department of Trade after two years away in another guise, I found a number of old friends waiting for me, including insolvency law reform. I accept that this matter is urgent. The present arrangements are quite unsatisfactory. There is scope for the unscrupulous to exploit them, and I assure my hon. Friend that we wish to see reform carried out urgently.

Mr. Wrigglesworth: Is the Secretary of State aware that his reply will be viewed with great disappointment by many small firms that are hit by the inadequacies of current insolvency law? It is now more than a year since this report was published and three months since one of his predecessors promised the House urgent action. Will he therefore get his finger out?

Mr. Speaker: Order. I do not think that last remark is on the proscribed list, but it is in rather bad taste.

Mr. Parkinson: I did not think that in the party of the Simon Pure expressions such as that were allowed. The hon. Gentleman had better watch himself or he may get expelled.
This is an urgent and complex matter. The Cork report is a huge, weighty document, and it took a huge committee a long time to produce it. We want to get on with this, but I cannot promise the hon. Gentleman very early action.

Mr. Nicholas Baker: Is my right hon. Friend aware that many of us fear that civil servants in his Department have been dragging their feet on this issue? His answer will therefore give us considerable comfort. Will he also bear in mind that one of the advantages of changes in the

insolvency law will be that companies which would otherwise go to court and out of business will be more likely to survive, thereby saving jobs?

Mr. Parkinson: My hon. Friend the Minister responsible for corporate affairs has a special hatred of people who drag their feet. He is committed to getting on with urgent work on this difficult matter, and my hon. Friend has given yet another example of just how unsatisfactory the present arrangements are.

Mr. John Fraser: Is the right hon. Gentleman aware that the attitude of the Minister responsible for corporate affairs is on the whole to do nothing and to leave this to voluntary action? On the protection of creditors, investors, depositors and so on, his Department has earned the reputation of being weak, sloppy, slow and self-indulgent. The Government have a duty to protect and advance the commercial law. We therefore want to see action on Cork and other such matters as rapidly as possible, so that we can end a long series of scandals and inequities in the commercial community.

Mr. Parkinson: I thought that this was an occasion to question the Government, not to reminisce about one's days in a sloppy, slothful, useless Department, which was how the hon. Gentleman spent his days in the Department of Prices and Consumer Protection—

Mr. John Fraser: You pathetic creature.

Mr. Parkinson: My hon. Friend has been in office for just six weeks. He is getting on, as a matter of urgency, with some extremely important work. He has some interesting ideas on how we can make progress, but the hon. Gentleman should wait and see. He will get a very pleasant surprise.

Spain (Import Duty)

Mr. Roger King: asked the Secretary of State for Trade and Industry if he will make representations to the Spanish Government to reduce further their import duty on cars.

Mr. Channon: We must first see how sales of British cars in Spain respond to the new opportunities offered by the reduced duty quotas opened on 1 July. Meanwhile, we are proceeding with the negotiations on Spain's application to join the European Community, which will lead to the elimination of all import duties between us.

Mr. King: Will my right hon. Friend comment on the fact that the so-called reduction in tariffs that we now have is merely a sop, in that, up to the 1600cc level, Spain can send over 50,000 cars into Britain, whereas my workers in Longbridge can send only 997 vehicles to Spain? If we wait until Spain joins the European Community, we shall wait a very long time.

Mr. Channon: My hon. Friend will know that the new Spanish quotas have been open for only four weeks. They allow for 5,000 cars between 1275cc and 1600cc, and 10,000 cars of a higher cubic capacity, of which British Leyland has a large quota. I entirely agree with my hon. Friend that the position is not satisfactory, but it is a considerable improvement and was widely welcomed by the House when announced earlier this year.

Mr. Park: How many more excuses will the Government trot out before they deal with the Spanish


problem? The Secretary of State was very scornful just now about my hon. Friend the Member for Norwood (Mr. Fraser). Does he recall that when he was previously in the Department of Trade some years ago he told me that he would do something about the problem?

Mr. Channon: The new quotas were negotiated before either my right hon. Friend or I became part of the Department. They were welcomed in the House as a step forward. No one thinks that they go far enough. The long-term solution is to remove all duties between Spain and the United Kingdom. I hope that that will happen after a minimum transition period when Spain joins the European Community.

Mr. Hal Miller: Does my right hon. Friend recall that the welcome to which he referred was heavily conditioned by the assurance given to me by the previous Secretary of State that Britain would be given the lion's share of the reduced tariff quotas? That has not happened. Does my right hon. Friend also recall the assurance that the tariff discrepancies would be removed by the introduction in Spain of a VAT system to replace the luxury and other discriminatory taxes? Can my right hon. Friend give us any news on that front?

Mr. Channon: My hon. Friend will be pleased to learn that Spain has committed herself to introducing VAT before the end of next year. I hope that that will be an improvement. British Leyland has been allocated nearly one fifth of the reduced duty quota for small cars, which will enjoy the biggest cuts in duties, and one tenth of the quota for larger cars. British Leyland has done as well as any company in that regard. I recall the warm welcome that my hon. Friend gave to the agreement on 15 March.

Mr. Ashton: Will the Government stop pussyfooting and tell the Spanish Government that we shall impose a tax on Spanish holidays—and encourage our people to go to Italy and Greece—if the Spanish Government do not end the discrimination?

Mr. Channon: That is an interesting idea, but I think that the hon. Member and the House are a little unfair. The quotas have been open for only four weeks. We must see how they go. The quotas are renewable later and we shall have to see what progress is made. It is important that all the duties should be removed. That will not happen until Spain joins the European Community, and it is in the British interest to have the shortest possible transition period for that very reason.

Mr. Archer: Does the Minister appreciate that the Government appear to be bearing other people's misfortunes with great patience? Can he give the House any indication of how long it will be before Spain joins the Community? Do the Government feel no sense of urgency about it?

Mr. Channon: The British Government hope that Spain will join the European Community in 1986. I hope that the Opposition share that hope.

Small Engineering Firms Investment Scheme

Sir John Biggs-Davison: asked the Secretary of State for Trade and Industry how many offers of assistance have been made under the small engineering firms investment scheme.

Mr. Trippier: By 20 July 1983 we had made 2,716 offers of assistance—1,438 under SEFIS 1 and 1,278 under SEFIS 2.

Sir John Biggs-Davison: Do the Government intend to extend investment grants to manufacturing industry as a whole?

Mr. Trippier: The funds at our disposal are limited. Even if it were appropriate, we could not offer investment grants right across the board to manufacturing industry. We have to be selective. That is why investment grants are targeted at specific areas such as high technology and high unemployment.

Mr. O'Brien: Will the Minister tell the House what monitoring exercise takes place when the grants are given? Will he note what has happened to the United Glass Company in Castleford? Grants were made to the Canning Town Glass Company to develop a new scheme, thus closing schemes in other areas. Does the Minister agree that that has an important bearing on unemployment in my constituency and in that of my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse)? Does he also agree that there should be a monitoring exercise to ensure that investment in one area does not cause unemployment in another?

Mr. Trippier: I think that the hon. Gentleman is a little confused. His question is not related to the small engineering firms investment scheme.

Mr. Budgen: Is my hon. Friend aware that in the west midlands business men are less concerned with the small schemes of industrial intervention than with the gross distortions caused by regional policy? Will the Government please accelerate their review of regional policy while there is still the political will to do something—

Mr. Speaker: Order. The hon. Gentleman's question has nothing to do with the question under discussion.

Export Statistics

Mr. Kenneth Carlisle: asked the Secretary of State for Trade and Industry what percentage of United Kingdom exports went to other member states of the European Community in the last 12 months for which figures are available.

Mr. Channon: In the 12 months ending June 1983, 43 per cent. of the United Kingdom's visible exports went to the other countries of the European Community.

Mr. Carlisle: Does my right hon. Friend agree that those figures show that the Common Market is by far our biggest trading partner and that millions of jobs depend on our trade with Europe? Therefore, is it not high time that the Labour party openly accepted that we are in the Common Market for good, thereby providing a little more of the certainty that industry needs if it is to invest?

Mr. Channon: I entirely agree with my hon. Friend. Alas, I cannot speak for the Labour party, but we can say that we speak for the country. The country showed very clearly at the last general election what it thought of the Labour party's policy on the European Community.

Mr. Rogers: Does the Minister agree that one of our greatest exports to the European Community over the past


six years has been jobs and investment? Will the Government take any action to protect our industries, which are flying to the continent in order to take advantage of the unnatural subsidies that are being given by the other member states?

Mr. Channon: No, I cannot agree with the hon. Member. We send 43 per cent. of our exports to the Community. The figure was only 30 per cent. in 1970. Many jobs in the United Kingdom depend on that trade. The best estimate that we can make is that about 2·5 million jobs would be at risk if the Labour party's policy were to be carried out.

Sir Anthony Meyer: Is it not also a fact that the coverage of imports by exports is far greater in relation to our trade with the European Community than it is in relation to our trade with other advanced industrial areas —countries such as Japan and the United States?

Mr. Channon: What my hon. Friend says shows how important the market is to us and how important it is to stay in the Community.

Development Assistance Scheme

Mr. Kirkwood: asked the Secretary of State for Trade and Industry if he will consider establishing a new rural development area status as part of the development assistance scheme.

Mr. Norman Lamont: Assistance is already available to rural areas from the appropriate bodies in the different parts of Great Britain. The hon. Member's constituency, for example, can obtain assistance from the Scottish Development Agency.

Mr. Kirkwood: I thank the Minister for his reply. Is he aware that there is a growing body of opinion in Scotland that believes that the machinery available to the Scottish Development Agency is not appropriate to rural areas, whose needs are quite different from, but just as great as those of, the urban areas? Will the Government look at the problem again?

Mr. Lamont: ?: That must be a matter for the Secretary of State for Scotland.

Ceramic and Pottery Industry

Mr. Fisher: asked the Secretary of State for Trade and Industry if he will make a statement on the future prospects for the ceramic and pottery industry.

Mr. Trippier: I believe the industry is well placed to take advantage of a pick-up in demand.

Mr. Fisher: Is the Minister aware that the so-called "well placed" position has involved 25,000 jobs being lost and Britain becoming a dumping ground for cheap pottery goods from Malaysia and other far eastern countries? When will the Minister act to save a very lucrative and profitable industry from going down the drain?

Mr. Trippier: The hon. Gentleman should not assume that he has a monopoly of concern for the industry. I share that concern. The problems which the hon. Gentleman has outlined reflect the industry's difficulties during the recession. I do not underrate them, nor should the hon. Gentleman underrate the strength of the industry.

Greater Manchester

Mr. Tony Lloyd: asked the Secretary of State for Trade and Industry if he will reintroduce assisted area status for Greater Manchester.

Mr. Trippier: Successive Governments have designated assisted areas by reference to the circumstances in individual travel-to-work areas and this continues to be the case. I am satisfied that on present evidence the current assisted area gradings of the eight travel-to-work areas in greater Manchester are appropriate to their circumstances.

Mr. Lloyd: Is the Minister aware of how badly Greater Manchester has suffered over the past two years because of Government policies? Is he further aware that the enterprise zone in Trafford park has been a cosmetic exercise that has failed and that the Greater Manchester area, unless given practical assistance by the Government, is doomed to further decline?

Mr. Trippier: Perhaps I was a little kind to the hon. Gentleman in my reply to his substantive question. If he had done a little more research, he would have realised that there are some travel-to-work areas within the Greater Manchester county that are assisted. For example Bolton and Leigh are intermediate areas and Rochdale and Wigan are development areas. I have said before, in a previous Question Time, that regional policy is being reviewed and that it is too early to speculate on the outcome.

Statements

Mr. Speaker: As the House knows, there are no fewer than four statements to be made this afternoon, all of which are of great importance. I ask right hon. and hon. Members to be brief with their supplementary questions, please, and perhaps the Front Bench spokesmen would also help in this regard.

Mr. Gerald Kaufman: On a point of order, Mr. Speaker. It is directly related to the fact that the Secretary of State for Scotland is to make a statement. I have no idea of the contents of the statement, and no doubt my right hon. Friend the Member for Glasgow, Govan (Mr. Millan) will have his views on it. However, the Secretary of State is to make a statement on local government finance in Scotland.
What can you, Mr. Speaker, do to protect the House in relation to local government finance for England? The Secretary of State for the Environment promised the House that this month he would publish a White Paper on the rating system, but we now understand that he does not intend to publish that statement until the House is in recess, and that he does not intend either to publish the spending ceilings for English local authorites until the House is in recess, when Members of Parliament will no longer be able to question him and hold him to account.
As we are to get a statement from the Secretary of State for Scotland, what can you do, Mr. Speaker, to prevent this Administration, and in particular the Secretary of State for the Environment, from abusing the House of Commons and Parliament by withholding a White Paper and information on spending which is in their possession, which has been prepared, which could be made available, and which could be the subject of a statement, but which is deliberately being withheld, to the abuse of the House of Commons?

Mr. Speaker: I have no knowledge whether the White Paper is ready. I was in the Chair and I heard the Secretary of State say that a White Paper would be published this month and I imagine that that is the fact. As to the Scottish statement, there are many hon. Members in the House who would wish to hear it.

Rate Support Grant (Scotland)

The Secretary of State for Scotland (Mr. George Younger): With permission, Mr. Speaker, I shall make an announcement about the rate support grant settlement for Scotland for 1983–84 and for 1984–85.
Scottish local authorities' planned expenditure for 1983–84 is £121 million, or 4·5 per cent. higher than was proposed in the rate support grant settlement, despite enhancement of the figures which had originally been contained in the public expenditure White Paper, Cmnd. 8494. When I met the Convention of Scottish Local Authorities on 17 June I said that in light of this planned overspend it was my view that there would have to be an abatement in the rate support grant payable in 1983–84. I could not indicate at what level that might be until I knew the outcome of the selective action which I had initiated against certain local authorities on grounds of excessive and unreasonable expenditure.
On 21 July the House approved reports proposing reductions in the rates of four local authorities equivalent to expenditure reductions of £18·8 million. As local authorities have still not brought their expenditure into line with the Government's plans, I have no alternative but to make a general abatement of grant to bring pressure on authorities to make commensurate savings in their expenditure. I will lay this week a variation order reducing the rate support grant payable in 1983–84 to Scottish local authorities by £45 million. As with the abatement in 1982–83, I shall make arrangements to ensure that no authority will suffer a loss of grant greater than its excess at outturn over current expenditure guidelines and this will be by means of an adjustment in the rate support grant settlement for 1984–85.
I now turn to 1984–85. Last year on 28 July I announced, on a provisional basis, the public expenditure provision for Scottish local authority current expenditure in the following year. To assist local authorities in their forward planning, I will now provide similar information for next year. The provisional figure for local authority current expenditure will be some £2,730 million—that is, about £60 million more than the provision in the public expenditure White Paper, Cmnd. 8789. In announcing this cash increase I have taken into account the views expressed to me in consultations by the Convention of Scottish Local Authorities.
I will in due course issue current expenditure guidelines to authorities for 1984–85. I have taken into account the views expressed by the convention regarding the treatment of the unallocated margin this year and I can say now that the total provision in 1984–85 will be included in the guidelines. I hope that all authorities will be prepared to make a real effort to bring their expenditure into line with those guidelines in 1984–85.

Mr. Bruce Millan: That was a disgraceful statement and the penalties being imposed against Scottish local authorities are even harsher than those imposed in the statement made by the right hon. Gentleman last year. It makes an absurdity of the debate that we had last week dealing with specific penalties amounting to £19 million when, as I forecast last week, an even greater penalty of £45 million is announced a week after the debate.
Last year the so-called excess expenditure, net of specific penalties, was £170 million, on which a penalty of £27 million was imposed. This year, the net so-called excess expenditure is considerably less, at £102 million, and yet the penalty is considerably higher, at £45 million, which represents 45 per cent. of the so-called excess. From what the Secretary of State has just said, will not every local authority except three out of the 65 suffer from the penalties being announced today? I hope that Tory Members who voted for the penalties last week will remember that I said to them then that this is precisely what would happen to their authorities this week. A responsible authority such as Strathclyde will suffer a penalty of no less than £20 million as a result of this statement.
As to the 1984–85 expenditure, as usual the Secretary of State has dressed up the figures to make them look as if they are a concession to the local authorities, but the figure of £2,730 million that he announced is not even sufficient to provide for a reasonable rate of inflation compared with the equivalent figure announced last year. The figure is only 3 per cent. higher than that which he announced last year and will not cover any reasonable expectation of inflation in 1984–85. It is less than the figures that the local authorities have already budgeted for in their cash terms for the current year.
On any reasonable estimate, to reach the figures that the Secretary of State has announced, local authorities in Scotland would have to reduce their budgeted expenditure next year by about 6 per cent. in real terms. There is no hope of the Secretary of State obtaining such a reduction in 1984–85. If he were to obtain it, it would mean slashing thousands of jobs, such as teaching jobs, and local authority services. The Secretary of State will not get such a reduction and we shall go through the same farce in 1984–85 of unrealistic guidelines and the vast majority of authorities going above the guidelines.
May I ask the right hon. Gentleman about an omission from his statement? In July last year, he announced the rate support grant for the following year. He has not made such an announcement today. Will he give an assurance that the rate support grant for 1984–85 will be at least the 61·5 per cent. that applied for 1983–84? Unless he can give that assurance, he is, typically, giving the House only part of the story. We shall see a further tightening of the screw on local authorities in Scotland if, as I believe is likely, the rate of grant is further reduced later in the year.
The right hon. Gentleman spoke about consultation and taking account of the views of COSLA, but his Under-Secretary refused to give COSLA representatives the expenditure figures for 1984–85 when he met them this morning. Now that we have seen the figures, we know that they represent a tightening of the screw on Scottish local government. They will mean poorer services and more unemployment among local authority personnel. The cuts announced today are serving no useful economic or social purpose.

Mr. Younger: The right hon. Gentleman must see my statement against the background of our efforts over many years to persuade local authorities in Scotland to trim their spending into line with the Government's general economic policy. The right hon. Gentleman has always accepted that the Government have an interest in determining what that general level should be. His position seems to be that he accepts that principle but is against

selective action—he made that clear last week—and a general abatement. We are in a full circle. The right hon. Gentleman has not made his view clear. Either he favours local government spending whatever it likes or he favours some method of Government influence. I hope that he will make his position clear.
I have made no secret of the fact that, having been generous in the past two years—last year I even made savings in my own programmes to make matters easier for local authorities—I have had to make it clear that the Government are in earnest this year and that local government will have to bring its expenditure into line with the Government's general economic policy. That is what the figure that I have announced is intended to do, and I hope that that is what it will do.
Of course, because of the overspending of previous years, it will be difficult for local authorities to achieve the figure that I have announced, but I hope that my statement gives them the clear signal that, however difficult it may be, it is essential in the national interest that expenditure should be brought within the reasonable rates that we have suggested.
My hon. Friend the Under-Secretary was naturally not able to tell the COSLA representatives this morning the figure for the enhancement for next year. If he had done' so, the right hon. Member for Glasgow, Govan (Mr. Millan) would justifiably have complained that the figure should be announced to Parliament before being announced anywhere else. That is the main reason why I announced the figure to Parliament, and I hope that the House agrees that I was right to do so.

Several Hon. Members: rose—

Mr. Speaker: Order. I have a duty to protect the business of the House, and a number of other important statements are to be made. I propose to allow questions on this statement to run until 4 o'clock and I ask for crisper questions and answers please.

Mr. Bill Walker: My right hon. Friend will not be surprised to hear that Conservative authorities were expecting his announcement. They, too, are concerned that the expenditure over a long period of some of the high-spending authorities appears to give them an advantage over authorities such as Tayside, Perth and Kinross and Angus which have been prudent spenders for many years. Will my right hon. Friend bear that fact in mind when considering future figures?

Mr. Younger: I greatly appreciate what my hon. Friend has said. I am considering carefully whether we can do anything to make the general abatement operate more fairly.

Mr. Norman Hogg: Given that local government is labour intensive and that there is a direct correlation between cuts in expenditure and lost jobs, can the Secretary of State say how many Scottish local government employees may expect to join the dole queue as a consequence of his disgraceful statement?

Mr. Younger: Like the hon. Gentleman, I hope that decisions can be implemented quickly enough to ensure that there is no need for redundancies. He knows that Lothian regional council decided some time ago not to take on extra staff in case this sort of thing happened. If expenditure is to be brought down, it is better that it is done quickly, so that there is no need for redundancies.

Mr. Albert McQuarrie: Does my right hon. Friend agree that the majority of local authorities that will be affected by his statement are the overspenders which have consistently ignored his representations to trim their expenditure? They have increased the number of their employees beyond my right hon. Friend's guidelines. Authorities such as Grampian, Gordon and Banff and Buchan have shown that the Government's guidelines are effective and can be carried out satisfactorily without causing the problems that confront overspending authorities.

Mr. Younger: My hon. Friend makes an extremely good point. If the figures were as unreasonable as the Opposition make out, no local authorities in Scotland could work within the guidelines. But some have done so, and all credit to them.
The principal fact, to which my hon. Friend is right to draw attention, is that it is easy to run a local authority if one can spend whatever one likes. It requires good and effective management to ensure that one spends within what the nation can afford, and that is what I am asking local authorities to do.

Mr. Gordon Wilson: As local government expenditure is more than 50 per cent. of the right hon. Gentleman's own budget, will he explain what impact the changes will have on the pattern of public expenditure in Scotland, bearing in mind that such expenditure is declining in real terms, compared with that in the whole of the United Kingdom? What role is the right hon. Gentleman playing in Cabinet? Time and again, he comes up with poor results, leading to reduced public expenditure in Scotland, more unemployment and more misery.

Mr. Younger: The hon. Gentleman makes a good point when he says that more than 50 per cent. of the budget for which I am responsible is spent not by me but by local authorities. That is why it is impossible for me to ignore what they spend. The hon. Gentleman must accept that any Secretary of State must have some influence on what local authorities spend. If they spend more than they should, I have to make cuts in my programmes or in other spheres, and no hon. Member on either side of the House would be pleased to see that.

Mr. Michael Forsyth: Will my right hon. Friend confirm that, bearing in mind the many representations made by leading national firms, such as Marks and Spencer, that rates in Scotland are more than twice what they have to pay south of the border, his statement, far from being a threat to jobs, is the greatest possible boost to employment prospects in Scotland?

Mr. Younger: I agree with my hon. Friend. All of us who are involved in these matters should bear in mind that a large proportion of the rates raised in Scotland are spent without those who pay them having any influence on the democratic process.

Mr. Gregor MacKenzie: Will the Secretary of State answer the question asked earlier: how many people doing essential jobs—home helps and the like — will lose their jobs as a result of his statement?

Mr. Younger: I do not agree with the right hon. Gentleman. If I were on a local authority and had to make

expenditure choices, I cannot imagine that the first service on which I should look to save money would be the home help service.

Mr. Hugh Brown: Does the right hon. Gentleman recognise that there has been a deplorable deterioration in the relationship between central and local government? Is it not like a marriage breakdown, where there are usually faults on both sides? Can the right hon. Gentleman offer any hope of conciliation to help to produce the better relationship that is desperately required?

Mr. Younger: I appreciate the spirit of the hon. Gentleman's question and respond to it sympathetically. I could end the controversy for good by agreeing that local authorities should spend whatever they like. It would be easy for me to do that, but that would be to condemn the rest of the Government's expenditure programmes to substantial cuts, and I am sure that the hon. Gentleman would be the first to oppose that.

Mr. Malcolm Bruce: Will the Secretary explain how this statement will affect rural areas, as they have received less assistance from the Government than rural areas south of the border have received, and bearing in mind the fact that that is where services are most marginal? Does he acknowledge that rural areas are in the front line in cuts of this nature? Will he further explain whether councils such as Grampian, which has a surplus of £5 million, will be allowed to carry that forward or will have to give it back to the ratepayer, or will he cut it from next year's allocation?

Mr. Younger: I much appreciate what the hon. Gentleman says about rural areas. I can give him this comfort, that in general—there may be some exceptions —it is clear that authorities in rural areas have taken great care to keep their expenditure within reasonable bounds. I think I am correct in saying that the hon. Gentleman's own district authority is one that should not suffer at all from this abatement.

Mr. John Home Robertson: Who does the right hon. Gentleman think he is? This is the second week running that he has come to the House to interfere with the budgeting of Scottish local councils. Would it not be more appropriate to let those councils get on with their own jobs? Would it not be even more appropriate, instead of having a Secretary of State who seeks to represent the Treasury in Scotland, to have a Secretary of State who represents Scotland in the Cabinet.

Mr. Younger: The implication of what the hon. Gentleman says is that I should step back and allow local authorities to spend whatever they like. With respect, that is nor my view, not is it the view of his right hon. Friend the Member for Glasgow, Govan (Mr. Millan).

Mr. Jim Craigen: As only three of the 65 local authorities thought that the guidelines were realistic, are we to take it from today's statement that, in the view of the Secretary of State, there is no distinction to be drawn between selective action against local authorities and this indiscriminate assault on all our communities? Does he go to COSLA meetings with his ear muffs on because he does not seem to listen to its representations?

Mr. Younger: The facts do not bear that out. I said in my statement today that in the coming year the guidelines


will include what in the previous year was an unallocated margin, which COSLA strongly stressed should not be repeated. I have responded to that representation. On the general point, again the implication of the hon. Gentleman's question is that I should step back and allow authorities to spend whatever they like. Is that his view? It is certainly not the view of his Front Bench.

Mr. Robert Maclennan: Does not the Secretary of State realise that to announce special penalties one week and then to announce the next week a general abatement makes it plain that the Government are not prepared to allow local authorities proper control over their own expenditure, and that by announcing a general abatement lie is penalising authorities that are well within margins of expenditure that even he would acknowledge, and that by a subsequent rebate in the next financial year he does not ease the position of local authorities which are already in difficulties in this current year?

Mr. Younger: The hon. Gentleman used the words "proper control over their own expenditure". His question does not make much sense unless we know what that means. If it means that local authorities can spend whatever they like, irrespective of the Government's economic policy, I do not agree with him—nor, with respect, do the official Opposition—and I doubt very much whether even the SDP agrees with him.

Mr. Michael Hirst: Does my right hon. Friend agree that today's statement increases the obligations on Scottish local authorities to look at ways of making meaningful reductions in operating the various departments under their control? Does he further agree that councils could realise substantial savings by putting out services to tender, and will he encourage them to do so?

Mr. Younger: I am grateful to my hon. Friend for that suggestion. I should have thought that that was generally desirable wherever it produced acceptable services for the public at a lower cost. On general local authority expenditure, it is in the interest of the general public to have effective local authority services provided at the lowest possible cost. I hope that all local authorities will seek to do that as quickly as possible.

Mr. John Maxton: Is the Secretary of State aware that this extra cut in the expenditure of Glasgow district council must make it extremely unlikely that the Burrell gallery will be opened in October? Does not that more than anything else typify the Government's economic policy, in that enormous capital expenditure will have been undertaken although the revenue expenditure will not be available for the gallery to be kept open?

Mr. Younger: It depends on the priority that one gives to certain matters. I am bound to say that if I were on Glasgow corporation the Burrell collection would not be the first item that I would consider in making economies. I should add that I have contributed from my budget, pound for pound, what Glasgow corporation has produced. It was not easy for me to find my share, but I made savings elsewhere in my programme.

Mr. William McKelvey: Will the Secretary of State say how long and how often he will perpetrate this series of gross injustices against the democratically elected Scottish councils? If he believes

that to be kind he should be clinical, why does he not apply the coup de grace? Why not chop off their heads? Why not send in the Army, take over the councils and administer them himself?

Mr. Younger: If the hon. Gentleman's policy is to send in the Army to run local authorities, I cannot agree with him.

Mr. Tom Clarke: Is the right hon. Gentleman aware that this may be the last question, but that it will be by no means the last word on the matter? Is he aware that it is demoralising in the extreme for local authorities to be given a lecture of this kind when their record on budgeting is far better than that of central Government, particularly that of this Government? Did the Secretary of State take into account the Chancellor's announcement about the reduction in health expenditure, which means an increasing burden on the social services of local authorities? Did he not therefore consider increasing the allocation rather than decreasing it in that respect?

Mr. Younger: I appreciate what the hon. Gentleman says, particularly in view of his experience in local government. He will understand that it would be very easy to run local government if one did not have to pay attention to whether expenditure was going up. He made a comparison between central and local government. The Scottish Office has achieved a reduction of about 14 per cent. in manpower, whereas local authorities are not remotely near that achievement. I hope that the hon. Gentleman will recognise that.

Mr. Norman Buchan: Is it not an added impertinence for the Minister not only to take it unto himself to determine the level of services that should be provided in general terms but to offer gratuitous advice —rather impertinent advice—from the Dispatch Box? Does he recall that on an earlier occasion an attempt was made to bring in museum charges? That was done when the present Prime Minister was Secretary of State for Education and Science, and she was beaten largely by members of her own party, which, I confess, was a rather more civilised and less philistine party than it is now.

Mr. Younger: It would, of course, be much easier for me and my Department to sit back and ignore the whole question of local government spending. The reason why we cannot do so—it is a common view on both sides, at any rate between the Front Benches — is that local government expenditure is an indissoluble part of public expenditure as a whole. It is agreed between both sides of the House that the Government of the day must have some say in local government spending. The hon. Gentleman cannot get out of that commitment, and I hope that he will not try to do so.

Mr. Millan: Will the right hon. Gentleman answer one question that he has not yet answered? I said that, or my calculation, for local authorities to reach his figures they would have to reduce expenditure next year by 6 per cent. in real terms. Is that the figure? If not, what is the Secretary of State's figure?

Mr. Younger: That depends on the figure that the right hon. Gentleman is reducing from. If he is reducing from local authorities' actual expenditure, which is very much above the figure that the Government suggested, that gray well be the figure. I do not know precisely what it is. The


right hon. Gentleman has still not answered the question. If he agrees, as I understand he does, that the Government, of whatever party, must have some say in local government spending, if he is against selective action, and he is now against general action, what on earth is he in favour of? The answer is that he will not face these issues.

Mr. Speaker: I thank Scottish Members for their cooperation on the statement and wish them all a happy holiday.

Stock Exchange

4 pm

The Secretary of State for Trade and Industry (Mr. Cecil Parkinson): With permission, Mr. Speaker, I wish to make a statement about the case brought by the Director General of Fair Trading against the Stock Exchange in the Restrictive Practices Court.
Ministers have for some time been concerned that the court proceedings under the Restrictive Trade Practices Act 1976 may not be the best way to pursue the matters raised by the director general. While these proceedings are pending, it is difficult for the Stock Exchange to make changes to enable its members to compete for business worldwide. There is also a danger that the legal proceedings within the framework of the Act may damage the effective operation of the Stock Exchange, which remains essential to the working of our economy. Accordingly, the Government would wish to see the matter settled out of the court, if the Stock Exchange is able to make acceptable changes.
I decided to discuss the matter with the director general and thereafter with the chairman of the Stock Exchange. I explained that the Government had concluded that in order to safeguard the position of investors the separation of the functions of brokers and jobbers should be preserved at least for the time being in its present form. The House will recall that, in analogous circumstances, it insisted on separating brokers and underwriters at Lloyd's. The Stock Exchange's rules, which prescribe the separation of capacity, may have to be included in statutory provisions under European Community directives. In that case I intend to make regulations under the European Communities Act, 1972.
I said that I should also expect the Stock Exchange to make changes on points of concern to the director general. Following discussions with his council, the chairman of the Stock Exchange has made the following proposals to me.
The council will take action to dismantle by stages and with no unreasonable delay all the rules which prescribe minimum scales of commission, completing this by 31 December 1986. The Stock Exchange will continue the rules prescribing separation of capacity of brokers and jobbers. The council will introduce rules to permit nonmembers to serve as non-executive directors of limited corporate members of the Stock Exchange, provided that there is always a majority of directors who are members of the Stock Exchange.
The council will recommend to the members of the Stock Exchange changes which would, first, introduce lay members to the council of the Stock Exchange, their number and the method of their selection to be agreed with the Bank of England. Secondly, the changes would establish a new appeal body, independent of Stock Exchange members of the council. If the council were to reject an applicant for membership who fulfilled the requirements of the rules, the appeal body could review the decision and over-rule it. This body would include lay members of the council, but Stock Exchange members of the council would not be eligible. Thirdly, the changes would introduce people who are not Stock Exchange members of the council to the Stock Exchange's existing appeals committee on disciplinary matters so that they will


constitute at least a majority on the committee. Lay members of the council would be eligible to serve on this committee.
I believe that these changes are to be welcomed, and will enable the Stock Exchange to continue to adapt in an evolutionary manner to changing circumstances while maintaining proper regard for the needs and protection of investors. The next step will be for the membership to approve the necessary changes to the Stock Exchange deed of settlement.
I shall also make arrangements for the Department of Trade and Industry and the Bank of Eng and to monitor the implementation of these measures, and the evolution and development of the Stock Exchange as an efficient, competitive and suitably regulated central market which affords proper protection to investors.
Subject to those two points the Government will seek the approval of Parliament for measures to exclude the Stock Exchange from the operation of the Restrictive Trade Practices Act.

Mr. Peter Archer: Is the Secretary of State asking the House to accept that a deal between cronies in a smoke-filled room is a substitute for a full public inquiry into how public interest is affected by a major institution such as the Stock Exchange? Do not these minuscule concessions confirm what we had already suspected, that it was never possible, after years of shutting the door on every suggestion for reform, after setting its face against every proposal of the Office of Fair Trading, after resisting court proceedings at every step, that the Stock Exchange had undergone a change of heart and was embracing some significant reforms? Is not the truth that the Secretary of State has allowed the Stock Exchange to offer a minimum cosmetic deal that will enable him to protect it from a real inquiry?
In addition to the major matter of retaining the distinction between brokers and jobbers, are there to he no changes in the rules restricting the rights of non-members to acquire an interest in brokerage firms or in the rules inhibiting jobbers from entering into international arrangements to increase efficiency?
Who will pay the costs of proceedings up to date? May we debate these matters before any irrevocable steps are taken? If the Restrictive Practices Court is not to be permitted to inquire into the matters, does the right hon. Gentleman have any alternative proposals for a proper public inquiry into the most effective ways of protecting non-professional investors and retaining Britain's share of the benefits from the international trade in securities, or does he consider that that is not the proper business of the British public?
Does not the Government's obsession with open democracy and freedom of choice in trade unions apply in the secret recesses of the City? Is he aware that in the absence of any inquiry the public will understandably conclude that the Government have sold out to their City friends, who are helping them to sell off public assets at knock down prices?
Is this not a calculated slap in the face for the Director General of Fair Trading and his Office? If those marginal concessions were to be offered and accepted, could that not have been done before all the years of dedicated work, before four years of court hearings and before incurring £3 million worth of expenditure?
Why is the Bank of England to monitor the implementation of the new measures and not the Office of Fair Trading? Are the Government hoping to reduce morale in that office to the point where it does not seem to be worth trying? Are we to conclude that the Government no longer wish to conceal the fact that they do not believe in fair trading?

Mr. Parkinson: I congratulate the right hon. and learned Gentleman on his outburst of completely spurious indignation. I must point out to him that the trade unions were registered under the Act by his Government as an exempt body and that they are substantial donors to the Labour party. I should no more suggest that that was why they were given an exemption than I hope that he would imply that we were looking after our friends. The case for exempting the Stock Exchange is a strong one.
The concessions that the Stock Exchange is making are substantial. The abolition of minimum commissions will produce fundamental changes in the make-up of the Stock Exchange. If the right hon. and learned Gentleman had been to the New York Stock Exchange and seen the impact of the abolition of minimum commissions, as I have, he would not say that it was a small step. It is a major step.
The right hon. and learned Gentleman talked about the interests of non-members. That is precisely why we are bringing lay members on to the council and why the appeals committee will be composed of lay members—non-members of the Stock Exchange and people who are in a position to look after the interests of Stock Exchange users.
The right hon. and learned Gentleman asked who would pay the costs. The people who would have had to pay the costs of what we believe would have been a completely unnecessary and expensive action, from which only the lawyers would in the end have benefited, are the taxpayers. They are the persons who would have footed the bill in the first place.
The right hon. and learned Gentleman asked for a debate. As I have already said, I am reporting to the House on where we have now arrived. The Stock Exchange must implement the changes and put them in its rule book. Then, and only then, will the Government come to the House and propose the necessary measures. At that point the House will have every opportuniy to debate both the changes in the rules and the measures.
The Director General of Fair Trading can justifiably claim some credit for some major concessions that have been made by the Stock Exchange. The right hon. and learned Gentleman, as a lawyer, must know that there are many instances where costly litigation is avoided because at the last minute common sense prevails, and that is precisely what has happened in this case.

Mr. Edward du Cann: What form will the legislation take, and when will we have the opportunity to see it and debate it? Does not my right hon. Friend's constructive and necessary action show that there is a need for a complete restatement of competition policy, with particular reference to the public interest? Is there not something enormously synthetic about the great fuss about commissions, when the real deterrent to stock ownership and wider share ownership is the very high rate of stamp duty?

Mr. Parkinson: I am discussing legislation with the Attorney-General. We could go in two directions. First,


we could lay an order before the House and follow the affirmative procedure. Secondly, we could introduce a simple, short Bill — primary legislation. Whichever course is the most appropriate will be followed. I agree with my right hon. Friend that competition policy needs detailed examination. It may interest him to know that I have commissioned some urgent work on that subject. I shall report my right hon. Friend's views on stamp duty to my right hon. and learned Friend the Chancellor of the Exchequer, who is responsible for that matter.

Mr. J. Enoch Powell: What are the precedents for seeking to amend the statute under which proceedings can be brought while proceedings are pending under that statute and because proceedings are pending under that statute?

Mr. Parkinson: The Act envisages other bodies being added to the list of bodies already exempt from its provisions. There is a substantial list of exempt bodies, including the trade union movement, the legal profession and my profession. The Act envisages that other bodies can be added to that list—[HON. MEMBERS: "Answer the question".] I am answering the question. Opposition Members do not want to listen. The Government are satisfied that the changes proposed by the Stock Exchange to its rules would qualify it for exemption. We shall use the powers envisaged by the Act to add to the list of bodies excluded from its provisions.

Mr. Peter Tapsell: Is it not rather strange that almost exactly the same Opposition Members who, a few months ago, were expressing anxiety about the possibility of the Royal Bank of Scotland passing into overseas ownership, are now apparently in favour of the leading stockbroking firms of the Stock Exchange—of which I am a member — being bought by foreign institutions? That is exactly what will happen if the policies being used by the Opposition are pursued.

Mr. Parkinson: There are a number of inconsistencies in the Opposition's attitude, such as their attitude to single capacity. It was the hon. Member for Oldham, West (Mr. Meacher) who, in the case of Lloyds, insisted that there should be an underwriter, a broker and a customer. We are following that precedent now. They are comparable markets, yet we are already hearing a wholly different story from the Opposition.

Mr. Robert Sheldon: Have not the Office of Fair Trading and the Stock Exchange spent upwards of £1 million in preparing their cases? Do not they have rather more information than is available to the right hon. Gentleman in his Department? Would not that information be very valuable during the ordinary hearings? Is it not strange that a Government who are dedicated to the freeing of market operations should find themselves involved in limiting those operations in the Stock Exchange?

Mr. Parkinson: The right hon. Gentleman mentioned the cost to date. The legal expenses that would be incurred between now and the end of the case would run into several millions of pounds. At the end of that time we would have no more satisfactory a solution than we have now. The right hon. Gentleman argued that the proposals do not represent a change. They represent a major step forward

in liberalising the stock market. Dispensing with minimum commissions will sponsor a whole range of other changes. They are not simple steps. The Stock Exchange has dealt with two of the central arguments put forward by the Director General of Fair Trading. The Government disagree with him about single capacity. However, the two points raised by the director general are dealt with in the Stock Exchange proposals.

Sir William Clark: Does my right hon. Friend agree that those who understand the workings of the City will welcome his statement because for hundreds of years the City of London has acted in a self-regulatory capacity? It produces about £3,500 million of invisibles per year.
If we were to put upon the Stock Exchange or any other part of the City's activity the inflexibility of court rule and regulation, would not that inhibit the City, which is the world's leading financial market? Has not the Stock Exchange protected its investments over the years? I have no vested interest in the Stock Exchange, but its record shows that no investor has lost money because of the Stock Exchange or any broker going bust. The investor has always been protected. Do the Government intend to implement the proposals by regulation or by an Act of Parliament? If my right hon. Friend cannot say which of those courses will be followed, when will he be able to tell us?

Mr. Parkinson: I told my right hon. Friend the Member for Taunton (Mr. du Cann) that the Government have not yet decided whether to follow the affirmative order route or the primary legislation route. We shall follow whichever is the most effective.
In 1978 I spent a month in the United States studying the work of the Securities and Exchange Commission. I saw nothing to make me believe that we had anything to gain by copying its example. There is no evidence that its existence has prevented any increase in fraud—indeed, quite the contrary. I agree with my hon. Friend that an efficient central securities market is a vital component in our economy. I hope that the House recognises that.

Mr. Ian Wrigglesworth: Is the right hon. Gentleman aware that his statement makes a mockery of the Government's advocacy of greater competition? Do not many people in the City and in industry take the view that greater competition in the Stock Exchange would make it a more effective force and a more effective international financial centre? In addition to the right hon. Gentleman's consultations with the chairman of the Stock Exchange, what consultations has he had with the Director General of Fair Trading? Is there anything to stop the director general from continuing his present action?

Mr. Parkinson: I saw the director general before I spoke to any other person about this matter, other than colleagues in the Government. He was the first person to hear that I planned to have discussions to determine whether we could find an answer outside the court action. I saw him again yesterday. He would prefer to continue with the court action. However, we believe that it is the Government's duty to make a decision and bring it to Parliament. We must explain that decision and legislation must be laid before Parliament. It will be not the Government but Parliament that decides on a different view from that of the director general.
On the subject of greater competition, the hon. Gentleman underestimates the impact that the proposals —certainly the abolition of the minimum commission—will have in promoting very much greater competition.

Mr. John Stokes: Is my right hon. Friend aware that in the past the Tory party has always preferred the landed interest to the moneyed interest of the Whigs? In any dealings with the Stock Exchange, will he remember the party's historical stance?

Mr. Parkinson: I expected all sons of things this afternoon, but not a history lesson. I than my hon. Friend for it, and I shall bear his remarks in mind.

Mr. Jack Straw: Is the right hon. Gentleman aware that, by engaging in this unseemly and undignified charade, he has damaged his reputation and the reputation of the high office he holds, and has given the appearance of being more concerned to act in his capacity as chairman of the Conservative party than as Secretary of State for Trade and Industry? Is the reason why he has refused to allow the OFT to police the Stock Exchange, and instead has passed the job over to Mr. Leigh-Pemberton at the Bank of England, that Sir Gordon Borne actually opposed this decision? Will he explain what he means by a prompt and effective time scale when these changes will take up to 1986?

Mr. Parkinson: My answer to the hon. Gentleman's totally unworthy allegation about the Conservative party is that, just as I would no more suggest that his right hon. and learned Friend the Member for Warley, West (Mr. Archer), who spoke from the Opposition Front Bench and who is a lawyer, was motivated by the fact that huge fees would come from litigation—that would be a totally unworthy thought which I would not entertain—so he should not allege that I would be motivated in the way that he suggested.
The rest of his supplementary is not worthy of an answer, though I would point out to him that while it took the Securities and Exchange Commission nearly 40 years to break minimum commissions, we are suggesting the phasing out of them in three and a half years. The phasing out of minimum commissions will cause problems for many of the smaller firms and therefore they need to be phased out gradually.

Several Hon. Members: rose—

Mr. Speaker: Order. I propose to allow questions on the statement to continue for another 15 minutes, until 4.35. There is another important statement to follow on public expenditure.

Mr. Fergus Montgomery: Will my right hon. Friend explain why the Stock Exchange has been treated in this exceptional way? Is he aware that the Society of West End Theatre, in which I declare an interest, is in exactly the same position as the Stock Exchange and that, when that society went to see the two previous consumer affairs Ministers, it was told that the Government could not intervene and that once a complaint had been made by the Office of Fair Trading, the law must take its course? May I have an assurance that this sympathetic treatment of the Stock Exchange will be extended to other organisations?

Mr. Parkinson: The short answer is no, Sir. The Stock Exchange, the central securities market, is an absolutely

vital part of London's leading role as a world financial centre. It is unique; that is why the Government are taking this very special action.

Mr. Greville Janner: What costs were incurred before the Government's decision so unceremoniously to override and humiliate the Director General of Fair Trading by this extraordinary form of plea-bargaining with the Stock Exchange?

Mr. Parkinson: A great deal less than they would have been if the action had carried on. [HON. MEMBERS: "Answer."]

Mr. Ivor Stanbrook: Are not the Government themselves at least partly to blame for the misleading impression that has been given of a comparatively simple matter? Does my right hon. Friend agree that, in all civil cases, the object is not so much to bring a matter to trial as to secure satisfaction of one's claim? As the Stock Exchange is prepared to mend its ways, is it not obviously preferable that no more time and expense should be wasted but that the matter should be brought to a head as soon as possible?

Mr. Parkinson: I entirely agree with my hon. Friend.

Mr. Paddy Ashdown: Does the right hon. Gentleman agree that this points to the need for the long-term reform of the securities market? Will he now give a commitment to give serious consideration to any proposals along those lines that may be put forward by Professor Gower in his second report, to be published this autumn?

Mr. Parkinson: I have not yet received the Gower report, so it would be unwise of me to commit my self to accepting its contents. The Stock Exchange has been evolving even under the threat of legislation; the unlisted securities market was created by the Stock Exchange to meet a particular need, and the need to allow people to have 30 per cent. of the shares in a limited company which trades on the Stock Exchange has been accepted. The Stock Exchange has been moving forward and we believe that the changes that I have outlined and which have been agreed by the Stock Exchange—which its council has passed a resolution supporting—represent a major step in the right direction.

Mr. Neil Hamilton: Professor Gower has been prayed in aid from the Opposition Benches. Is my right hon. Friend aware that last week the professor said:
A court case is a dotty way of going about trying to change a rule book which is far too complex to be dealt with in this way?
Does he agree that the conclusion that this complicated matter should be dealt with out of, rather than in, court will receive widespread support from many interested observers?

Mr. Parkinson: I thank my hon. Friend for that remark. I was pleased to have Professor Gower's support in the matter. I hope that he and I will be able to agree in the future about everything.

Mr. Tam Dalyell: Does the Secretary of State recollect that it was one of the conclusions of Sir Harold Wilson's committee of inquiry into the City, after considerable and detailed agrument — I refer to paragraph 1411 — that there should be more explicit control by the Council for the Securities Industry and that its staff should be strengthened? Is he aware that, after a


great deal of detailed and serious thought, the case was put forward that it should have more control over the Stock Exchange? What role do the Government see for that council?

Mr. Parkinson: The Council for the Securities Industry, as the hon. Gentleman is aware, is playing an active role in the City and I do not believe that anything in the proposals that I have laid before the House today—the proposals of the Stock Exchange council—do anything either to undermine its authority or to prevent it from getting on with its work. These changes will create a more open and more liberal Stock Exchange, and I am sure that the CSI will be pleased about that.

Mr. John Maples: I congratulate my right hon. Friend on securing the abolition of minimum commissions. Does he agree that that was only one of the three major problems of the Stock Exchange that were making it uncompetitive in many international markets, the other two being the outside ownership of member firms and the broker-jobber relationship? Very often, the broker's costs were far in excess of the commissions. Will it be possible for my right hon. Friend to look again at those two elements in the settlement? Did I understand him to say that there would be a debate on the matter before the settlement was completed?

Mr. Parkinson: The way in which the matter will be concluded is by legislation, and therefore, to answer the last part of my hon. Friend's supplementary question, that legislation will be debated. To answer his point about outside ownership, I remind him that the Stock Exchange has been adapting its rules and that it is now possible for outside owners to own up to 30 per cent. — 29·9 per cent.; not more than 30 per cent. —of the shares in a limited company which trades on the Stock Exchange. Thus, part of that case has been conceded.
With regard to single capacity — the broker-jobber relationship—we believe that there is a strong case, in the interest of the investor protection, for maintaining single capacity. That is the view that the Government have taken, a different view from that held by Sir Gordon, but the Government have told the Stock Exchange that, in their view, the broker-jobber relationship should be continued. In doing so, as I say, we are following the example that the House urged on the Government in the case of the Lloyd's market.

Mr. Laurie Pavitt: I confess to the Secretary of State—no doubt to the surprise of many of my hon. Friends—that at one period I was a dealer on the floor of the London Stock Exchange. [HON. MEMBERS: "Hear, hear."] I soon had better sense, although I have not earned a decent salary since. During my period there, my experience showed that from time to time the interests of Government and of certain sections of the stock market had to be aligned. In those days it always happened — I could quote at least a dozen experiences to the Secretary of State —that when the Stock Exchange wanted something it always succeeded in imposing its will on the Government of the day, although that was a long time ago. Is the right hon. Gentleman aware that his statement today shows precisely that plus ca change, plus c'est la même chose?

Mr. Parkinson: The hon. Gentleman is revealing all sorts of unsuspected facets of his already admirable character. The Stock Exchange is making some fundamental changes in the resolutions, which the council has accepted and passed. Indeed, I stress that the Stock Exchange has accepted a substantial part of the case that has been advanced by the Director General of Fair Trading. We disagree with him about single capacity and we are prepared to put our view to the House and seek its approval. It is wrong for the hon. Gentleman to claim that the Stock Exchange has got its way because it has agreed to make fundamental changes. As a result, we believe that the action has become entirely pointless.

Mr. Tim Eggar: Surely a decision of this sort, which will affect the future livelihoods of many hundreds of thousands working in London and outside, should be taken in the House and not in a court. Will my right hon. Friend state categorically that a debate will first take place in the House and that the court case will not be withdrawn until the debate has been concluded?

Mr. Parkinson: I am not sure whether that which my hon. Friend asked me to confirm at the end of his question is what he really wants. I can confirm that we shall take such legislative action as will make the case before the court unnecessary, but that will have to be agreed by the court. In that event, the case can be adjourned, we hope, indefinitely.

Mr. Nicholas Baker: Does my right hon. Friend accept that what he has announced will be judged on the protection and encouragement that is given to small investors? Will he continue to resist all calls for increasing the control over the City by means of organisations such as the Securities and Exchange Commission?

Mr. Parkinson: I am happy to agree with my hon. Friend that the SEC road is one down which we should not travel. I agree that the protection of the small investor is an important part of the working of the Stock Exchange and that there is a need to protect him. I believe that our proposals will lead to more competition, which will be for the good of the small investor.

Mr. Colin Moynihan: Does my right hon. Friend agree that the Stock Exchange should be encouraged to change its rules so as to allow companies such as banks and North American security firms to have full membership?

Mr. Parkinson: I do not agree with that view. I believe that the Stock Exchange should gradually evolve. The abolition of minimum commissions will produce some substantial changes. The Stock Exchange has shown in a variety of ways that it is not resistant to changes. I consider that we should retain single capacity. The Stock Exchange has recognised part of the case put forward by my hon. Friend in allowing outside investors to hold 30 per cent. of shares in limited companies which can trade on the Stock Exchange.

Mr. Kenneth Carlisle: What is the significance of permitting non-members of the Stock Exchange to serve as non-executive directors of limited corporate members of the Stock Exchange?

Mr. Parkinson: At present directors of limited companies which trade on the Stock Exchange have to be


members of the Stock Exchange. Therefore, an outside investor, who could hold up to 30 per cent. of the shares, could not have a director on the board of the company unless he was himself a member of the Stock Exchange. This will enable non-executive directors who represent those who hold a chunk of the equity to have a seat on the board.

Mr. Nicholas Budgen: Why do the Government believe in self-regulation of the City when they deny self-regulation to the trade unions by refusing to make the closed shop enforceable?

Mr. Parkinson: That is an interesting question, which I will discuss with my right hon. Friend the Secretary of State for Employment when I next meet him.

Mr. Archer: I asked the right hon. Gentleman to answer two questions which have been asked and not yet answered. First, has the CSI been asked to express a view? If so, what view has it expressed? Secondly, why is there to be monitoring by the Bank of England and not by the Office of Fair Trading?

Mr. Parkinson: I have not discussed this matter with the CSI—

Mr. Dalyell: Why not?

Mr. Parkinson: Because at this stage we are talking only about a proposal from the council of the Stock Exchange which has been made to me. I shall discuss the matter with the CSI, but the CSI does not have the right to overrule the Government and the House of Commons. I should have thought that the hon. Gentleman who, thank goodness, seems to have got rid of his Argentine fixation, would have recognised that.

Mr. Archer: The second part of my question was directed to monitoring.

Mr. Parkinson: The Director General of Fair Trading has no monitoring role in this instance. We are taking the matter away from him because we are saying that the Stock Exchange should be excluded from the orbit of the Restrictive Practices Court. We believe that the Government, the DTI and the Bank of England are in a better position to do the monitoring.

Mr. Wrigglesworth: On a point of order, Mr. Speaker. As you know only too well, relations between the House and the courts are always delicate and sensitive when proceedings are under way. I seek your guidance, Mr. Speaker, on the exact position in relation to the action that was being discussed in the course of the questioning of the Secretary of State on his statement. Is it proper for the Government to intervene, which it appears they will do, in a court action that is proceeding in the manner in which the Secretary of State described this afternoon?

Mr. Speaker: The hon. Gentleman will not be surprised to know that when I knew there was to be a statement on this issue I considered the matter carefully. I am satisfied that it was proper and in order for the Government to make the statement.

Mr. Dalyell: On a point of order, Mr. Speaker. Is it proper for senior members of the Cabinet to suggest, after having made a statement, that someone who asks a perfectly civil and agreeable question about the CSI is insulting the House of Commons by suggesting in his question that the CSI takes precedence over the House of Commons? That was not the question that was asked and the Secretary of State knows that. He should not get away with not answering a question by saying that the hon. Member who asked it is insulting the House.

Mr. Speaker: I think that the hon. Gentleman knows that as we near the summer recess there are many things said in this place that at other times we might phrase rather differently.

Public Expenditure

The Chief Secretary to the Treasury (Mr. Peter Rees): With permission, Mr. Speaker, I would like to make a statement on the measures to be taken to implement the decisions announced by my right hon. Friend the Chancellor of the Exchequer on 7 July to restrain public expenditure in the current year.
The gross reduction will be about £670 million. The net total will be somewhat less than this because the lower cash limits will lead to less underspending. But, as my right hon. Friend the Chancellor said on 7 July, it will be at least £500 million net. The detailed changes in cash limits and the external financing limits of the nationalised industries are being published in the Official Report.

Mr. Peter Shore: The House has listened to the Chief Secretary's belated, reluctant and dismal statement. Is he aware that a statement of such brevity on a subject of such importance, accompanied as it is by seven pages of tables and with no chance of a full debate, is an insult to the House? Has he not the capacity or the courage even to summarise the effects of the cuts on major Government Departments' expenditure? Will he say what will be the effect on employment of these measures which the seven pages of tables omit to tell us?
This is a catalogue of mindless cuts. It turns out that the cuts will amount to £670 million against the forecast £500 million. They are to be inflicted on community services and nationalised industries. Is this not just one more exercise in inept and brutal surgery of the sort that we have had all too much of in the past four years? Is the right hon. and learned Gentleman not aware of the disruption and dismay that will follow this decision, three months into the current financial year? Does he realise what it will cause to all those in health, education and other public services who have to plan their expenditure programmes?
Does the right hon. and learned Gentleman accept that the decision is bound to lead to further hasty cuts in public investment programmes, including programmes involving building and construction, as well as in the levels of current public services?
Does not the exercise give the lie to what the Government said, both before and during the election campaign, about planned public expenditure? Does it not add up to a gross deception of the electorate? Can he recall one occasion during the election campaign when the Prime Minister, with her repeated claim that the National Health Service was safe in her hands, mentioned the now announced forced reduction of 8,000 Health Service employees?
Does the right hon. and learned Gentleman recall his own words on 6 July, when he told us that panic measures would not characterise this Administration? Is it not plain that these are panic measures which are being railroaded through Cabinet by our inexperienced and doctrinaire Chancellor of the Exchequer, frightened by the money supply figures for June and the Government borrowing requirement figures for the second quarter? What does he say now that the second quarter's PSBR figures, published six days ago, show that the borrowing is within the Chancellor's target range? Has not the Chancellor, during the past seven weeks, established a record for

incompetence and deception that makes the previous Chancellor appear to be an exemplar of clarity and foresightedness?
These cuts will harm the sick, the elderly, schoolchildren and those in need and will further damage and weaken public and private industry. The Government have no mandate for them.

Mr. Rees: Even allowing for the rather feverish point that we have reached in this Session, I am bound to say that the right hon. Gentleman's intervention was characterised by extraordinary hyperbole, but we recognise the pressures on him. I should have thought that the House would welcome the fact that the third statement this afternoon was brief. I hoped to be given some credit for that.
It is impossible or me to calculate the unemployment consequences, as the right hon. Gentleman knows.

Mr. Shore: Why?

Mr. Rees: The right hon. Gentleman said that these were inept and brutal cuts. I shall put the figures in perspective. We are talking about £500 million when overall public expenditure is about £120 billion. The right hon. Gentleman's criticisms cannot be justified against that background. He appears to be riding two horses. He said that there was gross deception during the general election but that the Chancellor's announcement on 7 July was panicky and unjustified. I am prepared to debate both points, but not at the same time. A modest readjustment was called for as a result of the information that became available to us in the days before 7 July. The right hon. Gentleman also prayed in aid the PSBR figures. They have turned out to be near the figures that we anticipated.

Mr. Richard Wainwright: Is the Chief Secretary aware of the deep disappointment felt because he has not announced the abandonment of such unnecessary and disruptive action now that it is clear that his right hon. Friend the Chancellor was wildly inaccurate in anticipating the PSBR figures? Will he tell the House the Government's assumptions on prices and costs and how heavily these cuts fall on capital expenditure so that we may assess the effects of the cuts?

Mr. Rees: The hon. Gentleman knows the assumptions that were made at the time of the Budget by my right hon. and learned Friend the then Chancellor of the Exchequer, and I see no reason to vary them. On 7 July my right hon. Friend announced cuts of 1 per cent. on pay and general administrative expenses and 2 per cent. on other items of Government expenditure.

Sir Kenneth Lewis: We appreciate the shortness of my right hon. and learned Friend's statement as we are about to go on our long holiday and hope that other Ministers will follow his example when we return from the recess.
How much of this expenditure has not yet been undertaken but is proposd in Ministries' budgets? If it has not yet begun, the figure is probably a good deal lower than the one my right hon. and learned Friend gave.

Mr. Rees: I am grateful for what my hon. Friend said about my statement's brevity. I shall endeavour to live up to that standard even at the risk of cheating the Opposition of a full statement into which they can sink their teeth.
My hon. Friend is correct in saying that, the earlier adjustments are made during the fiscal year, the easier they


are to achieve and the less painful they are for the Departments involved. For those reasons, we thought it right to make the adjustments early in the financial year when it became clear that departmental budgets were likely to be underspent in certain areas.

Mr. J. Enoch Powell: When the tables are published, will the Chief Secretary ensure that the misprint is not included in class XVII, Northern Ireland Office? Can he say when the Secretaries of State for Northern Ireland, for Wales and for Scotland will be making corresponding statements on non-voted cash limits so that we can see what will be the impact of these alterations upon those parts of the country? In particular, what is the justification for £5 million out of £12 million of the adjustment in Northern Ireland falling upon law and order and protective services?

Mr. Rees: I am sure that my right hon. Friends responsible for Scotland, Wales and Northern Ireland will take careful note of what the right hon. Gentleman has said. The detailed allocation of the spending is a matter for them and not for the Treasury. We shall endeavour to correct any misprints in the tables.

Mr. Nigel Forman: What steps is my right hon. and learned Friend taking to ensure that the 2 per cent. cuts in the nationalised industries' cash limits are not passed on in increased prices beyond what would otherwise be commercially defensible?

Mr. Rees: We are aware of the impact of such price increases on the RPI and consumers generally. However, that is not to say that it is not right to look from time to time at the realities of nationalised industries' prices.

Mr. John Evans: Will the Minister acknowledge that this is part of the manifesto that the Tory party would not allow to be discussed during the recent general election? Will he confirm that as a result of these disgraceful cuts regional and district health authorities throughout Great Britain are discussing the closure of hospital units and wards and, in some cases, entire cottage hospitals?

Mr. Rees: There was no secret manifesto. These cuts are no part of any alternative manifesto. I can reassure the House that expenditure on the National Health Service as a whole in England will remain at planned levels.

Mr. Anthony Beaumont-Dark: I wish to ask the Minister about EFLs for nationalised industries. He must have seen today that the British Gas Corporation made a profit of £630 million in spite of £600 million being taken back by the Government. With the EFLs announced today, one has a horrid feeling that we shall transfer part of Government expenditure—not calling it taxation — by way of further increased nationalised industry charges. From a quick look at the figures, it appears that electricity prices are due for a big rise because the EFL has been reduced by £418 million, for the British Gas Corporation by £43 million, for British Telecom by £117 million and for the Post Office by £51 million.
I hope that we are not going to introduce subtle taxation by way of an increase in nationalised industry charges which affect industry and people more grievously than direct taxes. If these figures mean that nationalised

industries will increase their charges because of what we are doing, the House must know now so that it can decide whether it is a sound policy.

Mr. Rees: I see no reason why the measures announced by my right hon. Friend on 7 July should result in any increased nationalised industry charges.

Mr. Andrew F. Bennett: Why cannot the Minister tell the House the employment implications of the statement? Does he agree that it will have further implications for public expenditure? Surely he must know how many people will be put out of work because he should know how much more unemployment benefit will have to be paid and how much the Government will have to forgo in the tax which they would have received had these people remained in jobs.

Mr. Rees: There is no precise causal link between the adjustments that we propose and the unemployent figures, as the hon. Gentleman will realise if he reflects upon the matter.

Mr. Nicholas Winterton: Will my right hon. and learned Friend assure the House that his announcement today and that made by the Chancellor of the Exchequer earlier this month will not result in discrimination against the more provident local authority which over a number of years has heeded Government warnings on expenditure? Will he also confirm that the cash limits for nationalised industries to which my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) referred will not lead to price rises in monopolies which will then be passed on as additional costs to British industry, which is just beginning to get off the ground and which will make it less competitive?

Mr. Rees: The proposed adjustments do not affect the local authorities. As I said to my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), there would be no justification for any price increases in the nationalised industries as a result of our proposals.

Dr. Jeremy Bray: Does the Chief Secretary agree that the real shape of the hidden manifesto will emerge when we see the planning total rolled on for the financial year 1986–87 when next year's Government expenditure plans are published? Does he acknowledge that the distribution of the cuts this year will be taken as a sign of what he will try to achieve in his discussions with Cabinet colleagues on the next round of public expenditure cuts?

Mr. Rees: The House should not infer anything from the adjustments that my right hon. Friend and I have announced. It will have an ample opportunity to consider our policies when the public expenditure White Paper is published. No doubt there will be ample opportunity to debate it, its implications and history.

Mr. Richard Needham: Further to the point raised by my hon. Friend for Birmingham, Selly Oak (Mr. Beaumont-Dark), can my right hon. and learned Friend tell the House whether the figures published in the document show that the cash limits for the electricity industry have been reduced by £418 million? If that is so, can my right hon. and learned Friend explain how it will not be necessary to increase prices to offset such reductions?

Mr. Rees: My hon. Friend will not have had time to immerse himself in the tables. The tables of EFLs for nationalised industries show the absolute levels and not the changes. The total overall reductions for the nationalised industries referred to in the table amount to £58 million.

Mr. Ian Wrigglesworth: Is the Chief Secretary aware that his statement is a mark of the failure of the Government's economic policy and that many people regard as another failure the Government's policy of—as The Times described it—
selling off the family heirlooms to pay the grocery bill"?
Why does not the statement show that some of the proceeds of the capital sales on which the Government are embarking will be reinvested in further capital assets for the country rather than spent on current expenditure?

Mr. Rees: The modest readjustment measures that have been presented to the House today show nothing of the kind. They do not signify a failure of the Government's economic policy or of their control of public expenditure. They show modest readjustments at the end of the first quarter of the fiscal year. We thought that it was much better to take those modest measures now than risk a greater overspend later in the year. I am sure that, if the House thinks dispassionately about it, it will applaud our prudence and caution.

Mr. Max Madden: How does the Chief Secretary reconcile the Chancellor's statement on 7 July with previous considerable underspending on cash limits? Is it not a fact that on 7 July the Chancellor jumped the gun and that as a result of his measures, hospitals will be closed and thousands of doctors, nurses and ancillary staff in the National Health Service will be sacked unnecessarily?

Mr. Rees: There is no ground for what the hon. Gentleman has suggested. I have already said what the impact on the NHS in England is likely to be. He can draw his own conclusions, as can the rest of the House. These are modest measures which do not justify the absurd and extravagant forecasts made by the hon. Gentleman.

Mr. Roland Boyes: Is the Chief Secretary aware that the figures will lead to greater unemployment and continue the upward trend of unemployment, probably beyond the present job gap of 5 million? Is he aware that there is a relationship between unemployment and poverty and that the cuts on personal social services, which are criminally irresponsible, are a direct attack on the poorest people?

Mr. Rees: If the hon. Gentleman studied the measures he would see that the cuts applied to every Department. They are not concentrated on any one area or on any one section of our society. The hon. Gentleman might reflect on the fact that it is much more likely that unemployment will be generated if public expenditure is not kept firmly under control, as it has been by the Government, and if the PSBR is not kept to the modest level that we propose, which will allow plenty of scope for the private sector to increase and generate lasting sustainable jobs now.

Mr. Laurie Pavitt: Is the right hon. and learned Gentleman aware that for the Treasury to make separate compartments for social services and community services on the one hand and health services on the other is to make complete nonsense of the Government's policy on the mentally handicapped and the mentally ill? Is he

aware that in my area, where we have a hospital of 1,400 beds at Shenley for the mentally handicapped, last week my local authority suffered a cut of £500,000 and that the week before there was a cut of £7 million on the Brent borough council, which means that the idea of taking people from institutions into the community is sheer nonsense? If the Government impose cuts on both sides in their policy, we cannot do anything.

Mr. Rees: I am not informed in detail about the precise cuts to which the hon. Gentleman referred. I very much doubt that they could result from the measures that my right hon. Friend announced on 7 July. However, I have no doubt that my right hon. Friend the Secretary of State for Social Services will take careful note of the hon. Gentleman's detailed points.

Mr. Mark Fisher: Will the right hon. and learned Gentleman explain his remark that it is "impossible for me to calculate the unemployment consequences"? Does that mean that he has not considered the implications for unemployment? With £110 million from the Department of Health and Social Security, and the Department of Education and Science providing £28 million and the Ministry of Defence providing £220 million, mainly from procurement, surely he can understand that it is impossible to make cuts without there being a dramatic effect on unemployment.

Mr. Rees: If the hon. Gentleman feels that adjustments of slightly over £500 million will have a dramatic effect, he is living in a feverish world. I have said clearly that it is impossible to make a precise calculation, and it is much better that I should say so than guess at the figures, which the hon. Gentleman seems disposed to do.

Mr. Tam Dalyell: Under class II, votes 3 and 4, do the British Broadcasting Corporation external services and the British Council agree that the £500,000 cut from each of them is simply a modest readjustment? Does the Secretary of State for Defence — the somnambulant Secretary of State—who has distanced himself somewhat from Treasury Ministers, agree that the cuts in class I, votes 1 and 2—the right hon. Gentleman has a great smirk on his face, so I suspect that he does not, because we all know that he was not consulted—were so modest that he need not be consulted? Was he agreeable to all that? He is smiling broadly, so let us hear the truth.

Mr. Rees: I am happy to say that the decisions that were announced by my right hon. Friend on 7 July were collective decisions by the Cabinet. I refer the hon. Gentleman to the votes to which he referred. The cash limits of 7 July for the Foreign and Commonwealth Office were about £77 million and for the British Council about £40 million.

Mr. Stuart Bell: Will the Chief Secretary look at class IX on the reductions in cash limits for the Home Office? Will he give an assurance that the cut of about £7 million in the prison service will not add to the tension in our prison service and its difficulties in accommodating too many prisoners in our gaols? Will he also give an assurance that the cuts affecting the treatment of offenders will not affect young offenders, who require the greatest attention?

Mr. Rees: I am sure that my right hon. and learned Friend the Home Secretary has taken full account of those factors in arranging the allocation of the adjustments. It is a matter for the Department concerned and not for me.

Mr. Shore: I assure the Chief Secretary that brevity is one thing, but suppression of information is another. I should like to ask him two simple questions. As the DHSS announced only yesterday that 8,000 jobs will be lost as a result of the measures, why cannot the right hon. and learned Gentleman, in his capacity as Chief Secretary, supply information centrally rather than allow it to be dribbled out by Ministers over the next few weeks and months? Secondly, the cuts are supposed to be due to alleged overspending. How much of the alleged overspending is due to the revised EC budget contribution made by the United Kingdom as a result of the Prime Minister's failure at the Stuttgart summit?

Mr. Peter Rees: The detailed allocation of cuts within the cash limited programme is a matter for the respective departmental Ministers, and it is for them to answer questions on that.
The diminished refund from the EC is certainly an element in the overspend, but I cannot say exactly what proportion it represents as we are dealing with possible overspend for the entire year. We must consider how matters are likely to develop at the end of the year. On the best information available to the Government at and just before 7 July, it seemed advisable to make the modest readjustments which I am commending to the House.

Gibraltar Dockyard

5 pm

The Under-Secretary of State for Defence Procurement (Mr. Ian Stewart): With permission, Mr. Speaker, I should like to make a statement about the future of the dockyard in Gibraltar.
Following close consultation and detailed discussions between Her Majesty's Government and the Government of Gibraltar on the arrangements for the closure of the Royal Naval dockyard at Gibraltar, the establishment of a commercial ship repair yard to take its place and certain related matters, the Government of Gibraltar have agreed to recommend to the Gibraltar House of Assembly and fully to support the terms which have been agreed between us. The Chief Minister of Gibraltar is proposing a motion to this effect in the House of Assembly this afternoon.
The Royal Naval dockyard will now close by 31 December 1984, a year later than originally envisaged. To this end, a state of redundancy will be declared on 1 September 1983 in respect of the rundown of the Royal Naval dockyard. Individual redundancy notices will be issued thereafter as appropriate. Full redundancy payments will be made. It has been agreed with the Gibraltar Government that, following closure of the Royal Naval dockyard, the yard will re-open immediately as the Gibraltar Ship Repair Company, which will be a commercially managed enterprise with A. and P. Appledore International Ltd. acting as managers on behalf of the Gibraltar Government.
Associated with the closure of the Royal Naval dockyard and the establishment of a commercial yard, Her Majesty's Government have agreed on a number of measures of support for the Gibraltar economy. The land and assets for the commercial ship repair yard will be handed over free of charge to the Gibraltar Government. A total of up to £28 million will be provided to meet the initial cost of conversion, working capital, and operating losses, if any, in the first two years of commercial operation of the new yard. These funds will be committed only after satisfactory assurances have been obtained by the commercial operator from the work force on new working practices. Subject to those assurances, funds could be disbursed before closure of the naval dockyard. The flow of funds thereafter will depend on the maintenance of those working practices.
During the first three years of operation of the commercial yard, work will be provided by the Ministry of Defence on Royal Fleet Auxiliary vessels to the value of £14 million at current prices. Work will also be available on other Ministry of Defence vessels to an approximate value of £500,000 to £1 million per year. In addition, the Ministry of Defence is leasing accommodation to the Gibraltar Ship Repair Company for use by management staff so as not to throw an additional burden on to Gibraltar's scarce stock of housing.
Agreement has been reached on new arrangements for the transfer of surplus defence land to the Gibraltar Government. The Ministry of Defence has also undertaken to release to the Gibraltar Government a number of sites which will facilitate the development of tourist and commercial facilities on the Rock. Release will take place when present facilities on those sites have been reprovided elsewhere and when the Gibraltar Government are ready to proceed with development. In addition, the Ministry of


Defence has agreed to review its long-term property requirements to see what other sites might be available in future for transfer to the Gibraltar Government.
If there are any future difficulties for the Gibraltar economy, Her Majesty's Government would be prepared, in line with the policy of supporting Gibraltar during the present border restrictions, to examine the whole economic and budgetary situation with a view to considering whether — and, if so, what — further measures of support might be necessary or justifiable in the circumstances of the time.
The closure of the Royal Naval dockyard at Gibraltar inevitably poses considerable problems of readjustment for those who work there and for the economy as a whole. Nevertheless, given the substantial measures of support that I have announced for the dockyard and for the broader development of the economy, I am confident that the establishment of a commercial yard will provide a real opportunity for Gibraltar and its people to create a viable and effective alternative.

Mr. A. E. P. Duffy: Gibraltar, like the United Kingdom, depends on its maritime links and trade for survival. Since the announcement in June 1981 of the intended closure of Her Majesty's dockyard, the need to revitalise Gibraltar's greatest asset—its port —has become glaringly apparent. Therefore, the House will show the greatest interest in any initiative that seeks to fill this unnatural gap in Gibraltar's economy.
Are the Gibraltar Government confident that the new ship repair company will succeed, as there have been repeated initiatives in the past to phase the local shipyard into Her Majesty's dockyard and its three dry docks? An added difficulty is the far-away anchorages since Spain reclaimed the use of the commercial anchorages adjacent to the existing shipyard.
Did full consultation take place with the relevant trade unions? What does the Minister mean by "new working practices"? Is it true that they include a no-strike clause? How far is the establishment of the new company consistent with the need of the Royal Navy and NATO to retain a major base, with full supply and support facilities to back up their fleets, at the entrance to the Mediterranean and the Atlantic approaches? How far does the success of the company depend on full implementation of the Lisbon agreement? Is the Minister sure that, unlike the Falklands dispute, no wrong signals will be sent to Madrid?
The Opposition are anxious that the new commercial shipyard should succeed. If we receive satisfactory replies from the Minister to our questions, especially on the new working practices, we might then welcome his proposal, albeit cautiously.

Mr. Stewart: No one can be absolutely sure whether the commercial dockyard will succeed because we all recognise the present difficulties of the shipping industry. However, we have guaranteed a substantial work load worth £14 million on Royal Fleet Auxiliary vessels in the next three years. That will give the new commercial dockyard a good start. With the money available for modernisation and the further support measures that I have announced, I think that the new commercial yard will have every opportunity of success.
As to rival anchorages and other facilities in the Spanish area, such stories have been around for a long time but

nothing tangible has happened. It is important for the commercial future of the yard that new working practices are introduced to enable it to be fully competitive in the world markets. A no-strike clause may be included in the conditions put to the work force by the commercial operators. If so, I am sure that that would assist the future prospects of the yard and would be welcomed by Opposition as well as Conservative Members. The matters to be included in discussions on working practices, which will naturally include shift work and so on, will initially be the responsibility of A and P Appledore International.
I endorse the hon. Gentleman's comment about Gibraltar's importance to the Royal Navy. I emphasise that we shall maintain a fully operational naval base in Gibraltar as well as the dockyard in its new form. The naval base is of the greatest importance to the Royal Navy and our position in the NATO Alliance.
With regard to the Lisbon agreement, one of the reasons why we have felt it necessary to make extensive provision to assist the Government of Gibraltar is the adverse effect of the border restrictions on Gibraltar's economy. It will not be necessary for the Lisbon agreement to be ratified to give the new commercial yard every prospect of success. However, Gibraltar's status, and no doubt that of its shipyard, would be enhanced greatly if that agreement could be implemented without further delay.
As regards the signals that my statement might give to Madrid, I hope that the fact that the Government of Gibraltar and the United Kingdom Government have come to this constructive agreement will demonstrate our full commitment to Gibraltar's future along the lines of the close relationship that we have had for many years.

Mr. Duffy: Will the £14 million-worth of Royal Fleet Auxiliary orders be sent to Gibraltar at the expense of British yards, notably of Tyneside? Perhaps I can take the Minister up on his point about new working practices. Does he not think it disgraceful that a British Government should be party to setting up a new commercial company and, moreover, putting public money into it, when it will insist on a no-strike clause?
The Minister has been to Gibraltar and met the trade unions involved, as have I. Is he aware that such new working practices would be unacceptable to those trade unions?

Mr. Stewart: Unlike the hon. Gentleman, I see nothing disgraceful in introducing working practices that will contribute to the efficiency and therefore the competitive success of the commercial yard. Of course, the £14 million-worth of Royal Fleet Auxiliary work over three years will be undertaken in Gibraltar at the expense of British dockyards or British shipyards.

Mr. Duffy: Which ones?

Mr. Stewart: At this stage, it is impossible to say.

Mr. Duffy: The Minister can say now.

Mr. Stewart: If the hon. Gentleman will allow me, I shall endeavour to answer his question. As the hon. Gentleman knows, the allocation of Royal Fleet Auxiliary work is one of the marginal items between the United Kingdom naval dockyards and British shipyards. As work progresses and as time passes, it must be decided whether such work is placed with the dockyards, or with the shipyards or a mixture of the two. I regret the loss of £14 million of work of this type to Britain but the amount of


work provided by the Ministry of Defence to United Kingdom dockyards amounts to between £400 million and £500 million a year. Work given to British Shipbuilders amounts to about £400 million a year, and is rising. Therefore, we are talking about only 1 per cent. of the total work.

Mr. Albert McQuarrie: I congratulate my hon. Friend and the Secretary of State on arriving at some conclusion about the commercialisation of the Gibraltar dockyard. It has been a sorry history ever since commercialisation was originally suggested, and it has caused a great deal of anxiety in Gibraltar.
I hope that the House of Assembly in Gibraltar will be able to approve the recommendations that the British Government and the Government of Gibraltar have made. However, I am slightly worried that allocation of the £28 million for working capital depends on the work force accepting new restrictions. I understand that those restrictions are concerned not so much with working practices as with parity. The work force in the dockyard has achieved parity, and I understand that the new operators intend to phase that out when they become the managing agent for the Gibraltar Government. I am deeply worried about that firm's ability to carry out the work.
Does my hon. Friend seriously envisage the labour force initially being 300-strong in 1984, rising to 700 after a few months and gradually increasing to 2,300, which is its present size? Does he have a guarantee from A and P Appledore International that that will happen? Shall we have another Bailey's of Malta whereby, at the end of the period of management, the firm packs its bags and walks out, leaving us high and dry? To the credit of the Government, there is a commitment to sustain the support if the commercialisation is found not to be viable.

Mr. Speaker: Order. The hon. Gentleman has already asked several questions.

Mr. Stewart: I am grateful to my hon. Friend for his general welcome for the proposals. There have been difficulties but I am glad that they have been resolved to the satisfaction of the Government and the Government of Gibraltar. Like my hon. Friend, I hope that the House of Assembly will, in its debate, endorse the proposals in this agreement.
Like the hon. Member for Sheffield, Attercliffe (Mr. Duffy), my hon. Friend mentioned new practices. I have already commented on them. Work in a commercial yard differs substantially from that in a naval base that is partly a naval base and partly a Ministry of Defence dockyard. In current conditions parity of employment terms is perfectly reasonable, but under an independent commercial operation, it is clear that the best thing would be to adopt whatever working practices give the best chance of success.
My hon. Friend also asked about the numbers employed. The commercial operators hope to be able to re-engage about 300 of the work force almost immediately after closure of the naval yard. That number will rise within a few months to about 700. Progress from that size depends on the yard's success in developing business. I emphasise that the amount of Royal Fleet Auxiliary refitting work that we have undertaken to provide the yard between 1984 and 1987 is substantial and will give the new yard every opportunity to develop successfully.

Mr. Tam Dalyell: As one of the representatives of the Forth valley, which includes Rosyth which is in the constituency of my hon. Friend the Member for Dunfermline, East (Mr. Brown), am I not justified in thinking that this package is extremely generous to the Gibraltarians? Perhaps I may ask a different type of question. Although this is the fag end of the session and the fag end of Question Time, is this not an extremely far-reaching decision? Have the Government thought fit to consult and conduct discussions with the democratic and Socialist Government of Spain, as these proposals involve our future relations with Spain? Have we had the courtesy or the wisdom to consult Spain about this matter?

Mr. Stewart: If the Spanish Government had had the courtesy to implement the Lisbon agreement, matters would have been quite different.

Mr. Robin Maxwell-Hyslop: To what extent have the Government had discussions with Morocco about the fate of the Moroccan workers, without whom the economy of Gibraltar would have collapsed in the years following the closure of the frontier by Spain? My hon. Friend's statement went much wider than the dockyard, so I shall ask, as I have in the past, what responsibility the Government accept for the future of the Moroccan work force. One cannot expect the Gibraltar Government to focus their attention primarily on this matter. I do not know what form of social security there is in Morocco, but it would be a dishonourable day for Britain if we overlooked the interests of those people, without whom, I repeat, the economy of Gibraltar would undoubtedly have collapsed following the closure of the frontier. Does my hon. Friend accept that it was the wish of the Spanish Government that it should collapse, but that many Moroccan workers filled the gaps and enabled Gibraltar to survive?

Mr. Stewart: My hon. Friend raises an important matter. There is no doubt that the contribution of the Moroccan work force to the economy of Gibraltar, especially of the dockyard, has been much appreciated in Gibraltar in recent years since the closure of and restrictions on the border. However, it is not for the British Government to negotiate with the Moroccan Government about this. The Moroccan workers are engaged by the dockyard and will qualify for redundancy payments, which are generous, exactly similar to those for Gibraltarians.

Mr. Kevin McNamara: May I return to the conditions of employment and the establishment of the new company and ask the Minister what discussions he has had with the trade unions on the Rock about this matter? Is the insistence on a no-strike clause a condition that must be fulfilled before any money is given to that company? If people must take employment under the condition of a no-strike clause, are they not in the same position as members of Solidarity and Lech Walesa working in the shipyards in Gdansk? Do the Government wish to create that position in Gibraltar? Do the introduction of shifts, the cutting of wages, no-strike clauses and no permanency of employment represent what the Government stand for in Gibraltar, which has served Britain well, especially during the Falklands dispute?

Mr. Stewart: That is not what the Government want, and it is not the likely outcome of our proposals. The hon.


Gentleman refers again to the no-strike clause and other conditions, but they are matters for the commercial operator and the work force to discuss in due time. The Government wish the yard to be viable and successful, and the proposals provide the best chance of that happening.

Mr. Paddy Ashdown: As considerable anxiety is now being expressed in all quarters that the number of escort vessels available to the Royal Navy's operational fleet in the middle of this decade is liable to fall significantly below that which is required to fulfil our NATO and worldwide commitments, how will the closure of the dockyard affect the operational availability of Royal Naval ships, especially escort ships?

Mr. Stewart: I do not accept the hon. Gentleman's point, which he has made before, about the number of destroyers and frigates in the coming years. The closure of the naval dockyard will have no effect on the availability of such ships because the present Gibraltar dockyard is not equipped to refit a modern warship.

Mr. Gordon Brown: Will the Minister guarantee that no jobs will be lost at Rosyth dockyard in the refitting of Royal Fleet Auxiliary or other vessels? Is he aware that Rosyth is in a constituency parts of which have some of the worst unemployment rates in Europe?

Mr. Stewart: I am fully aware of the position at Rosyth. What happens to the work force there will depend upon many factors apart from what I announced today. I repeat that the amount of work involved, on an annual basis for a limited period of three years, represents no more than 1 per cent. of the work given to United Kingdom dockyards by the Ministry of Defence. To put the matter into context, we must accept that the dockyard is central to Gibraltar's economy. It has had major problems in recent years as a result of the closure of the border and subsequent restrictions, so the work that we are now offering is appropriate in the circumstances.

Mr. David Young: Is the Minister saying that, in negotiating this agreement, no discussions have been held with the trade unions? If such discussions have been held, will the Minister outline their outcome? If no discussions have taken place, is he prepared to come back to the House when they have?

Mr. Stewart: I shall give no such undertaking. I repeat yet again for those who find it hard to understand that it is a matter for the commercial operator to discuss and to negotiate with the prospective work force of the commercial dockyard what working practices will be necessary and acceptable for the satisfactory operation of the yard.

Mr. Greville Janner: Does that mean that the Minister will give no assurance to the work force that the Government will protect it by ensuring proper working conditions after the yard has been taken over? What assurances, if any, have the Government given to the Gibraltar Government, to the work force and to anyone else, and what will happen after 1987?

Mr. Stewart: It is not for the Government to give such assurances. We are playing a full part in providing a substantial range of measures of assistance to the Gibraltar

Government to establish what we all hope will be a successful yard. I have already said that there will be a large work load, not only of Royal Fleet Auxiliary vessels, but continuing work on Royal Maritime Auxiliary craft, and I am confident that the new commercial managers can take advantage of the opportunities for developing a successful business that I hope will provide more work in the years ahead and, no doubt, better conditions as a result.

Mr. Gregor MacKenzie: Is the Minister aware that although we welcome cautiously any initiative to help the Gibraltarians, we are nevertheless concerned about the future of the work force in the dockyard? Those workers made a considerable contribution during the crisis in the south Atlantic, and we look to the Minister to ensure that their future is protected in every possible way. I suggest to the Minister, whose Department is possessed of large tracts of land in Gibraltar, that it would be sensible to hand them over to Gibraltarians to be used for other purposes.

Mr. Stewart: I thank the right hon. Gentleman for his general welcome. I also add a word of gratitude for the success with which the SS Uganda refit was completed at Gibraltar last year. The right hon. Gentleman's concern about the work force is perfectly proper, but I must tell him that the best way to provide a long-term future for the work force of that dockyard is not to run on and run down a naval dockyard that the Ministry of Defence no longer needs, but to provide the conditions in which a commercial yard has every prospect of success. The extent of the measures that I announced today demonstrates how concerned and committed the Government are to providing for the future of those who work in Gibraltar. Some Labour Members have even complained that too much work has been offered to sustain the yard in the coming years.
The right hon. Gentleman mentioned large tracts of land. I announced in my statement that some important sites will be made available to the Government of Gibraltar so that they can take other steps to develop and diversify the Gibraltar economy while the major change in the dockyard is taking place. Those sites include the important Queensway area, which runs between the town and the harbour, and some of the coastal area in the region of Rosia Bay. The Government of Gibraltar regarded those sites as most important for their purposes. We are therefore making early arrangements to permit transfer of those sites as soon as we are able to reprovide the facilities and as soon as there are firm plans for development. This will be an important factor in the development of the Gibraltar economy, not only in the dockyard but in other ways.

Mr. Duffy: The Minister seems intent on getting the worst of both worlds. He will undoubtedly have outraged trade union opinion in Gibraltar, as my right hon. Friend the Member for Glasgow, Rutherglen (Mr. MacKenzie) has just warned him. The Minister was in Gibraltar two or three weeks ago and must have met the trade unions concerned. Did he not intimate that there might well be some change in working practices, even if he was not more specific?
The hon. Gentleman keeps referring to the dockyard in relation to the refit of Royal Fleet Auxiliaries, but he must know that these are also refitted in commercial yards. If he cannot give an assurance on behalf of Rosyth dockyard,


will he assure us that no jobs will be shed in any British commercial yard through loss of the refit of an RFA as a result of this statement?

Mr. Stewart: As I have explained, the allocation of Royal Fleet Auxiliaries is done as the need arises from month to month and year to year. It is impossible to give assurances of the kind that the hon. Gentleman seeks. If he is honest with himself, he will realise that that is the case.
Of course the trade unions and members of the work force in Gibraltar have some idea of what may be involved in the changeover. One of the reasons for allowing a further period before closure of the naval yard was to allow for a process of readjustment. I absolutely confirm that in our view the best prospects for the new commercial yard will depend on working practices that are compatible with efficiency and success in a competitive world market.

Rating Reform

Mr. Speaker: Mr. Gerald Kaufman, on a point of order.

Mr. Gerald Kaufman: I raised a point of order immediately after Question Time and in deference to what you said, Mr. Speaker, about the wish of hon. Members to question Ministers on the various statements that have just been made, I did not pursue the matter. With your permission, I seek to pursue it now in the interests of the House of Commons.
We are about to go away for three months, but the Government have not yet satisfied the House on why they are not publishing the White Paper on the rating system, which on 6 July the Secretary of State for the Environment specifically said would be published towards the end of this month. He has since made a statement referring the House to a statement that he made on 23 June, but presumably a 6 July statement supersedes a 23 June statement. On that occasion he was quite specific that he would publish the White Paper before the end of this month—in other words, before the end of this week.
Without some satisfactory statement from the Secretary of State, it is impossible for Opposition Members to lake a view other than that the right hon. Gentleman is delaying publication of the White Paper to avoid proper scrutiny and discussion by the House of Commons.
I raise this point of order because the interests of the House of Commons are at stake. The Secretary of State undertook to publish a White Paper this week. That undertaking will not be adhered to and, therefore, the interests of the House are at risk.

Mr. Speaker: The Secretary of State, who is present, is more able than I am to answer those questions, if he is prepared to do so.

The Secretary of State for the Environment (Mr. Patrick Jenkin): If you are satisfied, Mr. Speaker, that this is a point of order perhaps I can try to put the right hon. Gentleman's mind at rest.
In the debate on the Address, I said:
I hope that we shall be able to do that before the end of July. If the House rises before the end of that month,"—
as is the case—
I cannot guarantee to publish it while the House is still sitting." — [Official Report, 23 June 1983; Vol. 44, c. 253.]
That has been our position throughout. I had hoped that we might be able to complete the various procedures to enable me to make a statement. The right hon. Gentleman will acknowledge that I do not have a reputation for running away from the House of Commons. We may be able to put the confidential final revised version in the hands of the press and the local authority associations on Monday, but even now I cannot guarantee it.
Failure to publish this week is in no sense a discourtesy to the House. The purpose of the White Paper is to give the local authorities and those concerned with the future of the rating system a clear outline of how the Government intend to legislate. We shall not introduce the Bill until around, or even after, Christmas. The intention is that there should be a full period of consultation on the proposals in the White Paper before we give final instructions to the draftsmen.
Although it would have been convenient for the House to have had a first bite at the cherry had I made a statement on the White Paper, there will be ample opportunity for the House to express its views after we come back, and knowing the right hon. Gentleman as I do, I have no doubt that we shall also discuss this at considerable length when the Bill is introduced.

Mr. Kaufman: I thank the Secretary of State for coming to the House, and I thank the Leader of the House for responding to my representations which resulted in the Secretary of State being here.
In view of what the right hon. Gentleman said, particularly about the Government's acceptance of the need for consultation and the involvement of this House in consultation—it was in the interests of the House that I raised this matter—may I, with your permission, Mr. Speaker, ask two questions?—[HON. MEMBERS: "No."]

Mr. Speaker: I allow the right hon. Gentleman to do so.

Mr. Kaufman: As this is not a revelation of the contents of the White Paper, what will the period of consultation be? Secondly, will the right hon. Gentleman give a commitment that the House of Commons will be part of that consultation and that it will be permitted to debate the matter before the legislation is drafted?

Mr. Patrick Jenkin: I have never known right hon. and hon. Members to be slow in making their views known to Ministers on matters that closely affect their constituents. As to a debate, that must be a matter for my right hon. Friend the Lord Privy Seal.

Overseas Development Administration (Scientific and Special Units)

Mr. Guy Barnett: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the decision of the Government to run down the Overseas Development Administration's scientific and special units.
As the House knows, the Select Committee on Foreign Affairs presented its report on the scientific and special units in April this year. This morning, the Overseas Development Administration issued a White Paper — Cmnd. 9003—totally rejecting the Committee's findings that these units should be retained and even developed. The Department also called a press conference for this morning which had to be aborted when it was apparently discovered that such a step might involve a grave discourtesy to the House.
The Committee's findings, and the weight of expert evidence that it took, have never been debated in the House. The matter is specific and ought to be debated. But it is also urgent. From the evidence that the Select Committee took, it is quite clear that if the Government implement the recommendations set out in the White Paper, that decision will be irreversible. Teams of specialists will be broken up. The probability is that the change in Government policy will be far advanced in its implementation by the time the House has a chance of giving the matter proper consideration. Indeed, the White Paper specifically rejects the Select Committee's recommendation that the implementation of any action should be suspended to make possible the investigation of other options.
I believe that the matter is important for three reasons. The first is that the units have a crucial role in maintaining and improving the quality of aid—a matter of growing comment and concern among those who work in development. The second is that the units enjoy an international reputation, and their research and professional advice are sought from countries all over the world. The third is that their work in such fields as disease and pest control, tropical products and many others, is of direct interest to millions of very poor people living in very poor countries. For that reason alone, I believe that it is an important and urgent matter deserving the consideration of the House.

Mr. Speaker: The hon. Member for Greenwich (Mr. Barnett) seeks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
the decision of the Government to run down the Overseas Development Administration's scientific and special units.
I have listened carefully to what the hon. Gentleman said—as, indeed, has the House. As he knows, under Standing Order No. 10 I am directed to take into account the several factors set out in the order but to give no reasons for my decision. I have given careful thought to the representations that the hon. Member has made but I have to rule that his submission does not fall within the provisions of the Standing Order. Therefore, I cannot submit his application to the House.

BILL PRESENTED

ROAD TRAFFIC CONTROL (GREATER LONDON)

Mr. Harry Greenway presented a Bill to make further provision for the control of road traffic in the Greater London area: And the same was read the First time; and ordered to be read a Second time upon Friday 18 November and to be printed. [Bill 37].

Business of the House

Motion made, and Question proposed,
That, at this day's sitting, notwithstanding the provisions of Standing Order No. 3 (Exempted business) and Standing Order No. 4 (Prayers against statutory instruments, &amp;c., (negative procedure)), if proceedings on any Motions relating to Social Security and to Housing in the name of a Minister of the Crown or on the Motion in the name of Mr. Michael Foot relating to the Social Security (General Benefit) Amendment Regulations 1983 have not been disposed of before Ten o'clock, Mr. Speaker shall at that hour put forthwith any Questions already proposed from the Chair and on such of the said Motions as may then be moved; and thereafter Mr. Speaker shall at half-past Eleven o'clock put any Questions already proposed from the Chair and on such of the remaining Motions relating to Social Security and Housing as may then be moved.—[Mr. Douglas Hogg.]

Mr. Andrew F. Bennett: I must protest at the motion. The Government are treating all those who are dependent on benefits with very little regard —in a most cavalier manner.
There are now 1·83 million children who live in households that are dependent on supplementary benefit; there are over 9 million pensioners who are dependent on the benefits involved in the regulations; there are between 3 million and 4 million unemployed, and a very large number of sick and disabled people. All those people will be having their income for the next 12 months decided on the basis of the regulations.
The motion will ensure that 14 detailed and highly complex sets of regulations will be debated together and completed in under six hours. Having tabled such a motion, the Government should not have introduced today four statements which have taken over two hours of the time of the House.
I would not complain if the Front Benches had made a deal on the amount of time for debate on the regulations, but I do not believe that there can have been any agreement that the first two hours of the time available should be taken by statements. The Government appear to have managed today's business deliberately to ensure that the vital question of benefits for some of the less well-off in our society will get scant time for debate and will, moreover, be debated when the press will take little interest in it. The Government have already given the press four major stories, and we have reached the time when first editions start to go to bed. The Government have so managed the business as to deny the people who live on benefit the opportunity to have their issues and problems raised in prime time in the House.
Justice would be served if the Opposition were to divide the House against the business motion. The problem is that that would take 15 minutes and reduce further the time available for debate. Therefore, I rest my case by protesting at what I believe to be disgraceful management by the Government.

The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): The hon. Member for Denton and Reddish (Mr. Bennett) is an assiduous champion of the cause of social security beneficiaries and I can well understand his disappointment at the way in which matters have proceeded today. I assure him that we all live to some extent in a world of fantasy, particularly in July. One of the most acute forms of fantasy would be to assume that the statements were masterminded and orchestrated solely by myself. Had any of those


statements not been proceeded with or been delayed, there would have been so much resentment in the House that our procedures would have been very much more inconvenienced than they are.
I ask the hon. Gentleman to accept that in all such matters it is a question of balancing the conflicting interests of the House. I accept at once that valuable time has already been taken at the expense of a most important subject, but we can best atone for it by proceeding at once to deal with the orders.

Question put and agreed to.

Social Security

The Minister for Social Security (Dr. Rhodes Boyson): I beg to move,
That the draft Social Security Benefits Up-rating Order 1983, which was laid before this House on 5th July, be approved.

Mr. Speaker: I understand that with this it will be convenient to take the following motions:
That the draft Supplementary Benefit Up-rating Regulations 1983, which were laid before this House on 7th July, be approved.
That the draft Child Benefit (Up-Rating) Regulations 1983, which were laid before this House on 7th July, be approved.
That the draft Family Income Supplements (Computation) Regulations 1983, which were laid before this House on 7th July, be approved.
That the draft Housing Benefits (Increse of Needs Allowances) Regulations 1983, which were laid before this House on 7th July, be approved.
That the draft Pensioners' Lump Sum Payments Order 1983, which were laid before this House on 7th July, be approved.
That an humble Address be presented to Her Majesty, praying that the Social Security (General Benefit) Amendment Regulations 1983 (S.I., 1983, No. 981), dated 4th July 1983, a copy of which was laid before this House on 14th July, be annulled.
That the draft Supplementary Benefit (Requirements, Resources and Single Payments) Amendment Regulations 1983, which were laid before this House on 8th July, be approved.

Dr. Boyson: The order is accompanied by a report on its financial effects by the Government Actuary, and there is a separate statement which covers the uprating of mobility allowance.
As you have indicated, Mr. Speaker, it will, I think, be for the convenience of the House to consider with the order the four other affirmative motions on the Order Paper which relate to the November uprating of benefits, together with the order providing for the payment of this year's Christmas bonus, and the supplementary benefit regulations to which I shall return later.
The main uprating instruments put into effect the Government's proposals which were set out in the statement that my right hon. Friend the Secretary of State made to the House on 23 June. I shall not take up the time of the House by repeating the details that were given them. Suffice to say that we have now changed to the "historic" method of uprating, and the increases in most benefits are based upon the actual movement in the general level of prices in the year to May. That is the latest figure we can use if we are to ensure that the uprating increase are paid on time.
I make no apologies for the fact that the annual inflation rates for May—3·7 per cent.—and June are the lowest for 15 years. That is good news for pensioners and it is good news for the economy and for everybody in Britain.
It remains possible that by November inflation might rise to 6 per cent. If so, over the five-year period since November 1978 pensions will have gone up by 74·6 per cent. and prices will have risen by a little under 71 per cent. over the same period. Thus an increasing share of purchasing power has passed to our senior citizens. That is despite a severe worldwide recession, a rise of 600,000 in the number of pensioners as compared with 1979, and the build-up of pension rights for those newly retiring under the new earnings-related pension scheme.
If this year's uprating had been based on the old forecast method—the one brought in by the Labour Government


in 1976—it would have started with a forecast increase in prices of 6 per cent. Full adjustment for last year's over-estimate of 2·7 per cent. would have resulted in a rise of 3·3 per cent. in pensions, compared with the actual rise of 3·7 per cent. under the new method. [Interruption.] I remind Labour Members that in 1976, when the Labour Government changed from the historic method, the offer to the pensioners in that year was 6 per cent. less than the historic method would have given and they lost £500 million—the equivalent at present prices of £1 billion.

Mr. Brynmor John: Will the Minister, in giving us a history lesson, explain when there was a clawback of any over-provision to the pensioners?

Dr. Boyson: The Labour party brought in a system of making a forecast and then adjusting it, and as I have said, the original 6 per cent. was a loss. I know that some Labour Members are sore about our proposal, and some of them may not even know about it, but perhaps it will do them good to know about it. I must put it on the record that the pensioners lost £1 billion in purchasing power under the previous system.
We have protected not only pensions against inflation. Our record on the unpledged benefits is also a good one. Both child benefit and one-parent benefit are rising 11 per cent. this year, well ahead of inflation. That brings both these benefits to their highest ever value in real terms. By restoring the 5 per cent. abatement of unemployment benefit made in 1980 we are also ensuring that the rates of unemployment benefit will have been fully protected against inflation since 1978. Family income supplement and mobility allowance have been substantially improved in real terms since 1978, and the value of those improvements will be maintained with this year's increase. Similarly, the supplementary benefit safety net has also been fully maintained.
Last year it was decided that supplementary benefit scale rates should be increased in line with the movement of the general index of retail prices, excluding housing costs. This was because the housing needs of people receiving supplementary' benefit are met separately from the scale rates. This year the revised basis of calculation leads to an increase of 4·3 per cent. in the supplementary benefit scale rates, which is 0·6 per cent. higher than the increase in the full RPI. The supplementary benefit heating additions go up in line with the actual 8·6 per cent. rise in fuel prices in the 12-month review period. We have again substantially improved the supplementary benefit capital cut-off limit. That means that people can come within the supplementary benefit limit if they have capital up to £3,000. Last year the figure was £2,500 and the previous year it was £2,000, so there has been an increase of 50 per cent.

Mr. David Winnick: How generous.

Dr. Boyson: I do not know what the hon. Gentleman's mathematics is like, but that is a 50 per cent. increase in two years. If Labour Members are pleased with this increase, and are encouraging us to help people to build up capital, there will be rejoicing among those of us who believe in a capitalist society.

Mr. Winnick: rose—

Mr. Andrew F. Bennett: rose—

Dr. Boyson: I shall give way to the hon. Member for Denton and Reddish (Mr. Bennett), who is always highly concerned about these matters. We have sat together, and enjoyed doing so, on many Committees.

Mr. Bennett: The increase outlined by the Minister is no consolation for those who are on benefits now and who had to reduce their capital below £2,500. What will the Minister do about all those who have had to use up their savings in the past 12 months?

Dr. Boyson: The hon. Gentleman's question is rather like asking, "When did you stop beating your wife?" If we do not increase the limit we are attacked, and if we do we are still attacked and asked what we are doing about other people. I know that the country's public spirit is such that a cheer will go up for this uprating, not only among those who will benefit this year, but among others who know how important it is. I am glad that the hon. Member has drawn attention to it.

Mr. Winnick: Rejoice.

Dr. Boyson: Perhaps not here, but around the country, who knows?
The proposed increases in benefits involve a full year cost of about £1·5 billion and bring the total estimated expenditure on social security for 1983–84 up to £35 billion. They not only fulfil our pledges to pensioners and linked long-term beneficiaries, but also protect all the main benefits against inflation and give additional help on top to those on lowest incomes and to families with children. I am delighted to commend the proposals to the House.
The Supplementary Benefit (Requirements, Resources and Single Payments) Amendment Regulations have been considered by the social security advisory committee, and its reports are to be found in Cmnd. 8978. A number of changes were made to the draft regulations in the light of representations made to the committee and as a result of the committee's observations. The Government are grateful to the committee for the consideration it bas given to these proposals.
The regulations contain a wide range of changes to the supplementary benefit scheme, the majority of which are minor or technical. I think it may assist the House if I concentrate on two particular changes that have attracted some publicity. These concern the rules for meeting board and lodging charges and the rules whereby a deduction is made from a claimant's benefit if he is voluntarily unemployed. My hon. Friend will be glad to deal in his winding-up speech with any points of detail on individual regulations which hon. Members may wish to raise.
I now turn to the changes in the rules for meeting board and lodging charges. Currently, charges are met up to a level — the local limit — assessed locally as being reasonable for the area. It is impossible, however, to arrive at a single figure that caters adequately for ordinary board and lodging charges as well as for residential homes and nursing homes. The new regulations therefore provide for three separate local limits according to the type of accommodation occupied — private nursing homes, residential care homes and ordinary board and lodging. At the same time, the discretionary provision that allows certain charges to be met in full, even if they exceed the local limit, will be removed.
This discretionary provision was intended to be used only exceptionally where the personal circumstances of


the claimant and local conditions were such that it was unreasonable to expect the claimant to move. The decision on whether it is reasonable to expect the claimant to move to cheaper accommodation is in the hands of the local benefit officer and places a heavy burden on him. It has also been used in ways that were not intended when the current regulations were made. For example, it has been used to meet in full the charges for claimants in hostels for the rehabilitation of alcohol and drug misusers, though the rehabilitation element of the charge is properly the responsibility of health and local authorities.
An extension of up to £15·35 to the local limit will be provided for certain defined groups of people such as retirement pensioners, those with physical or mental disability or in hostels for drug or alcohol misusers, who may have to pay higher charges than the young and fit.
Overall, we consider that the provisions represent a considerable improvement and simplification of the existing arrangements. The SSAC shares this view, but we agree with it that the system will work as we intend only if the local limits are properly set and kept up to date. We shall therefore be monitoring the effect of the new arrangements on claimants and the accommodation provided for them. We are also setting up a survey to identify claimants whose charges will no longer be met in full.
Recently, there has been much press coverage of, and much concern on both sides of the Chamber about, the changes in voluntary unemployment deductions. These are made where a person has left his job without good cause, where he has been dismissed for misconduct or where he has unreasonably refused an offer of suitable employment. Under the regulations, he is then disqualified from receiving unemployment benefit for a maximum of six weeks, and for this period, supplementary benefit is also reduced. I shall explain what happened under previous Governments, including Labour Governments, as this has not been mentioned in the press, which has said enough about certain points of this Government's conduct on this matter.
Before 1971 the amount of the reduction was left to the discretion of local office staff, though the National Assistance Board, and its successor, the Supplementary Benefits Commission, issued guidance. The Social Security Act 1971 removed that discretionary approach and required instead that the deduction should be 40 per cent. of the personal scale rate of the claimant, with a maximum of 40 per cent. of the single householder's rate. Discretion was left with the local staff to make a smaller reduction if, in its opinion, the 40 per cent. cut would cause hardship. Again, the Supplementary Benefits Commission issued guidance, indicating such cases where staff should be particularly watchful for hardship, and telling staff that the reduction should never be less than £1.

Mr. Andrew F. Bennett: Will the hon. Gentleman give way?

Dr. Boyson: No. Opposition Members must take their turn, and the hon. Gentleman has already used up his first turn.

Mr. Roland Boyes: The voice of a headmaster—one at a time.

Dr. Boyson: Yes, indeed, one at a time. On reflection, I will give way to the hon. Member for Denton and Reddish.

Mr. Bennett: The hon. Gentleman has quoted the advice given by the commission. Was that guidance followed or, as I suspect, was it not followed in about 99 per cent. of cases?

Dr. Boyson: The reference to 99 per cent. is a hyperbole. We have found that guidance has not been carried out in all cases, and I cannot guarantee that it was carried out in every case. I am merely telling the House what the regulations were. It is difficult to know what happened 15 or 20 years ago. We are now dealing with current affairs, not history.
In 1980, the 40 per cent. deduction was continued unchanged when the system was changed to a regulation-based scheme, but the modified rate was set at 20 per cent., instead of being left to the discretion of local staff. The intention was that the lower deduction should be used where there was a risk of hardship, and the regulations laid down specific cases where it should apply. They were broadly the same as those listed in the earlier guidance of the commission, but the important difference was that the smaller deduction had to be made in all those cases. In the commission's day, they had been no more than cases where staff should be on the lookout for signs of hardship. That is the answer to the previous question of the hon. Member for Denton and Reddish.
Before the 1980 changes—in the time of the previous Labour Government—the lower rate deduction applied in no more than 2 per cent. of the cases with voluntary unemployment deductions. By the first month of the new scheme under a Conservative Government, that figure had leapt to 26 per cent. and had risen to 34 per cent. a year later.
Meanwhile, we heard frequent comments from local office staff that they were having to make the lower rate deduction when they considered that there was no risk of hardship. Therefore, the social security policy inspectorate was asked to look at the deductions, and especially at the lower rate and whether it was meeting its objective of avoiding hardship.
The inspectorate examined 579 cases in 17 local offices, visited 280 of the claimants concerned and interviewed 110 staff. It found no hardship in any of the cases that it examined and considered that none of the claimants with the lower rate deduction would have suffered hardship if the higher rate had been applied.

Mr. Gordon Brown: What definition of hardship was used?

Dr. Boyson: I am sure that the hon. Gentleman has read the report of the inspectorate on voluntary unemployment deductions. I thought that the question would be asked and I have written the definition in my own fair hand. The inspectorate said:
We would have said there was hardship had there been serious risk of the claimant or his family going without essential food or services. In no case was this so.
More than half the sample checked by the inspectorate were non-householders, almost all of whom lived at home with their parents. Only 25 per cent. were married and only 21 per cent. had children. About 80 per cent. were aged under 30, nearly half were under 21 and only 2 per


cent. were over 50. It would be interesting to hon. Members to read why some of those people went into voluntary unemployment.
In the light of the statistics, the comments from staff in the field and the inspectorate's report, the Government decided that they had to make changes. I hope that it is accepted on both sides of the House—if it is not, the Labour party must be even more out of touch with the people than I think it is—that there should be a benefit penalty for a person who is voluntarily unemployed. Let us not forget that that means that he is unemployed without good cause when a job is available.
The inspectorate report says that 40 per cent. of such cases referred to an insurance officer had their benefit allowed. There is a right of appeal to a tribunal for those dissatisfied with the insurance officer's decision. That shows that the rules are being applied fairly.
We believe that there should be a penalty for the small minority of voluntarily unemployed claimants and that it should be mitigated only where there is a real risk of hardship. I should be surprised if anyone outside the House disagreed with that view.
Therefore, we were faced with two choices — to increase discretion or to change the rules. We thought it right to change the rules, so that the lower deduction should apply only where there is pregnancy or serious illness in the household. The inspectorate recognised that additional expense could often be caused in such cases.
I have met a number of staff in the DHSS. Those dealing directly with claimants have told me that when rules were laid down and they could refer to the rule book, instead of having to use discretion, that was a great help to them. That is why we took the decision that we did. That is an important general point to make.
To put the issue in perspective, I should point out that voluntary unemployment deductions are made in only 190,000 cases a year — about 2·7 million successful claims are made by the unemployed — and that the deduction applies for the average of only four weeks. The difference between the 40 per cent. and the 20 per cent. rates will be a maximum of £5·35 a week for the uprating. The deduction is made only from the allowance of the person concerned—not from any allowance for a wife or children or from any other allowances. The £700,000 that we hope to save from the change will be used to give a package of benefits in other spheres. A list has been published.
No doubt we will be reminded that the SSAC advised us against accepting and acting on the advice of the inspectorate's report on tightening up on the number of cases. However, while we respect, as always, the advice from the SSAC, we accept the inspectorate's report. We shall carefully check to ensure that the changes work and reports will be made to us.

Mr. Archy Kirkwood: Is the penalty applied when a claimant who has left a job makes an application to an industrial tribunal?

Dr. Boyson: The deduction has always been made immediately a person leaves his employment. A rectifying payment is made when it is found that a person did not become voluntarily unemployed.
The inspectorate looked at all aspects of the procedure, and one finding caused much concern to Ministers. In too many cases, arrears of benefits were not paid where the

deduction had been made pending the insurance officer's decision which turned out to be favourable to the claimant. We have already announced that all "live" claims will be examined during the current uprating exercise. Any arrears found to be due will be paid. It is as wrong not to pay claimants money that they are due as it is not to penalise someone for becoming voluntarily unemployed. We have to be fair to the individual and to the society in which he lives. There is a double responsibiliy.
Anyone who believes that benefit may have been wrongly withheld in the past may ask for his claim to be reviewed. We are arranging publicity to make that widely known. We welcome suggestions that have been received on this issue and we are taking action.
A strong reminder has been sent to local oflices—I have the circular here, and if any hon. Members wish to see it, we shall be pleased to let them do so—about the proper application of procedures in future, and we are examining those procedures to see whether they can be improved. The average arrears owed to those claimants whose cases were seen by the inspectorate were £18 for the full period. That was in 21 cases out of the 579 that it examined. It shows that there may have been about 15,000 claimants who were underpaid in 1982.

Sir Kenneth Lewis: I want to mention a matter that has been raised by various people who are concerned. I realise that it is not easy to go back, but will the Department encourage its officers in the regions where there are known cases to tell the people involved that the money will be paid back to them, instead of depending on those people coming to them?

Dr. Boyson: Yes. We are taking the initiative, and we shall go through the records and call the people in and pay them back. If we owe them money, we shall pay it back to them. Publicity on the matter will be given, and leaflets are being printed. I am delighted to give my hon. Friend that assurance.
Before we have a holier-than-thou attitude from parts of the Labour party on this matter, let me record that there is every presumption that the non-repayment of unfairly levied voluntary unemployment deductions went on under a Labour Government, just as it has under a Conservative Government, and it is a Conservative Government who are doing something to clear it up. Similarly, I remind the Opposition that while under the Labour Government only about 2 per cent. of those suffering voluntary unemployment deductions had deductions less than the full rate, under the last and this Conservative Government some 40 per cent. received substantial rebates for hardship.
Let me add a further comment. I am grateful that the inspectorate, as a helpful, efficient and concerned body of public servants—I pay tribute to all the staff that I have met during the four or five weeks that I have been privileged to be in this Department — brought to my attention an injustice on some 25 per cent. of those who unjustly suffered unemployment deductions. Clearly, we had to act on that matter. I am also grateful that the inspectorate brought to our attention the fact that the rest of the community, including the mass of tax and insurance payers, was paying a price for the reduced deductions for many of those who were voluntarily unemployed and who, in the view of the inspectorate, would have suffered no hardship by the full deductions. There are two aspects to


the inspectorate's findings and I imagine that the Labour party, in its usual way, will accept one and not the other. We in the Conservative party, in our usual balanced way, have accepted the lot, on the advice that we have received.
Equity demands that we are fair both to the individual and to society. People should get back what is their due, but society has a right and a duty to inflict a penalty on those who would apparently prefer to live on the backs of other people for some time than to hold down a job. There is no doubt that in this even-handed approach, we shall have the backing of the vast majority of people in our country who have a highly developed sense of justice.
I conclude by stating plainly that I consider that the record of our Government on social security throughout is fair and honourable. At a time of severe recession in the Western world, when we are trying to rebuild our economy from the ravages of Socialism and Labour Governments, we have given as much as we can to those least advantaged in our society. It is easy for an Opposition who believe in the alchemist's stone or funding from outer space to clamour for more and more money to be spent — to come, I remind them, from the working population—but we have followed a realistic and compassionate approach, and neither I nor my hon. and right hon. Friends will bow to the Labour party as if it had a monopoly of goodness and compassion. The electorate of Britain, probably the most sophisticated electorate in the world, showed on 9 June that it certainly did not share that view, and it considered that its future, at whatever level of society, was more likely to be fair and prosperous under the continuance of a Conservative Government. The electorate showed that it had no intention of handing our country over to a Labour party that is rent by dissension and wholly out of touch with both economic reality and the changing aspirations of our people.

Mr. Brynmor John: We are discussing a long series of instruments and it is not merely for the convenience of the House to take them in the way we have done, but it saves much parliamentary time. It does not promise well for the future, if, when such an arrangement has been reached, a cut in debate of the magnitude that we have had this afternoon is arranged by the Government business managers without the courtesy of informing the official Opposition spokesmen in the usual way. If that is how business is to be conducted in the House the Government will suffer, because one and a half hours for each order would represent a considerable effort. It would certainly fragment the debate, and the House would be delayed for many more hours.

Sir Kenneth Lewis: rose—

Mr. John: No, I shall not give way, because I have only just started. I shall give way later, but not on this matter.
There has been a cut of two hours in the time for a debate which involves millions of the poorest people in our country. That is a disgrace.

Sir Kenneth Lewis: On a point of order, Mr. Deputy Speaker. This matter has been raised before. I ask for your guidance. How does the House prevent itself from being

deceived? The hon. Gentleman says that time has been wasted on statements, although at least two of those statements were made at the request of the Opposition.

Mr. Deputy Speaker (Mr. Paul Dean): The hon. Gentleman is an experienced parliamentarian. He knows that that is a point of complaint, not a point of order.

Mr. John: It shows how wise a parliamentarian I was not to give way to the hon. Gentleman in the first place.
Secondly, I extend a welcome to the Minister of State, who has made his maiden speech in his new capacity. I must tell him frankly that when he started his speech he was viewed with deep suspicion by Members on these Benches, and when he finished his speech those deep suspicions were fully confirmed. The suspicious asked why the hon. Gentleman was given office. The millions who depend on these instruments need be in no doubt about his attitude towards them. In an essay that he wrote in a book in 1971, he described the recipients of social security benefits as
the idle, the failures and the feckless
who are bleeding
the energetic, successful and thrifty".
His other view of the welfare state is this:
Not only is the present welfare state inefficient and destructive of personal liberty, individual responsibility and moral growth, but it saps the collective moral fibre of our people as a nation.
Those are the hands into which the care of the welfare state has been placed by the Government. The hon. Gentleman will have to forget a lot, as well as learn a lot, if he is not to go down in history as the DHSS Bourbon of this Government.
By contrast — I know that it will discomfort the Secretary of State—I thank the right hon. Gentleman for the press releases, or leaks, of recent weeks. Some newspapers say that he should stand firm against the punitive raids by the Chancellor of the Exchequer for a further £5 million, but to do that he will have to show greater resolution than he has done in the past. The present Chancellor is like Atilla the Hun without his charm. I am glad to see the hon. Member for Eltham (Mr. Bottomley) in his place because the Secretary of State will have to put up a real fight, not what I would describe as an Eltham rebellion. An Eltham rebellion consists of endless warning shots to the Government about what will happen next time they try something such as this—never in the present. To adopt a naval metaphor, the hon. Gentleman is the only example of a ship that fires warning shots at the same time that it strikes its colours. If the Secretary of State is sincere in what he is reported to have said, he can count on our support in a fight.
The report already casts a long shadow over the debate. The Secretary of State would be wise to recognise that it would be an act of savagery to allow the poorest to suffer more than they have already. For example, there are rumours of cuts in unemployment benefit and short-term supplementary benefits which will cause them to fall behind the cost of living. Nor are the Government pledged to price-protect long-term supplementary allowances—the allowances received by the long-term sick and disabled, single parents and those who care for disabled parents.
I say to those Conservative Members who still regard themselves as wets that the time to speak out about those projected cuts is now. It may be a crime to confess that they are wets openly, so perhaps they will commune


among themselves and decide whether they still regard themselves in that category. If they value their reputations, they will also need to do something which they never did in the previous Parliament, and that is to act upon their good wishes as well as to speak about them. If they fail to do so, they will be stained by the dishonour of these further cuts as much as if they were the most evangelical of monetarists.

Mr. Winnick: Does my hon. Friend agree that it is most unlikely that the Secretary of State will do anything in the Cabinet to help the poor and resist the cuts, because previous critics in the Cabinet have been sacked? As the right hon. Gentleman is far more concerned with his job than in protecting the interests of the pensioners and the poor, we cannot expect any help from him.

Mr. John: I always believe in the doctrine of human perfectibility. A bland record of opposition in the past does not mean that he cannot change and be a far more doughty fighter in the future than he has been in the past. I have said only that it will be a real fight.
I was addressing myself to those few wets who meet in the privacy of their homes and are able to reassure themselves that their hearts are still in the right place. If they speak on this issue, they will have public opinion on their side. They may not have the Minister of State on their side, but that may be an added advantage. A Marplan poll which was published this week showed that 73 per cent. of those questioned disagreed with the proposal mooted by the Government to allow unemployment benefit to fall behind the cost of living and only 20 per cent. were in favour of it.
I give the Secretary of State, or perhaps even the Minister of State, mild applause, perhaps a cheer and a half, for his belated and partial recognition of the scandal — that is not too strong a word — of the wrongful deduction of money from unemployed people for so-called voluntary unemployment. That was recognised by the Government and for that I give them thanks, but it was not unconnected with certain pressures and the Minister should not be too sanctimonious in claiming all the credit for the decision to remove the injustice. That will be a valuable step for those people who are sill on state benefit, and it is also a valuable corrective for the Minister of State who, in that fertile essay, which will go down as well as the noble Lord Barnett's book in the previous Parliament, said that rules were bent by the staff of the DHSS because of the fear of complaints made to newspapers and MPs. In this case, rules were broken, not merely bent, to the disadvantage of claimants and that is why I ask the Minister to reconsider, if he is not already beyond that stage.
We are glad of what has been promised but I want to press the Minister a little further on what he said this afternoon. There were two great weaknesses in what he said. The first is that the reason for the errors was, in almost every case, the fact that inadequate numbers of staff were having to cope with an explosion of people claiming unemployment benefit. No proposals have been made this afternoon or at all by the Government to rectify that. Without an increase in the staff dealing with unemployment, there is likely to be a weekly repetition of the mistakes that were made in this case and they are likely to recur constantly.
Secondly, like the Minister of State, we are concerned with those not now on benefit and who are therefore not

covered in the uprating review. Many are unaware that any deduction was made. The inspectors found that 50 per cent. of the decisions sent to them were illegible so that they could not read the reasons that were given for the denial of benefit. After a year, I understand that their papers are destroyed.

Dr. Boyson: There were defects in the forms and I believe that new forms have been prepared. I am sure that the hon. Gentleman will agree that that is a minor but important point.

Mr. John: The hon. Gentleman is talking about the future, and for that I am glad, but I am taking about those who have already suffered wrongful deductions who are no longer in receipt of benefit. Therefore, I want a pledge from him that the Government will monitor whether the publicity that they now intend to mount will bring to life the dead cases and claims which may not otherwise be activated. If not, I hope that other more effective steps will be taken to put the matter right. For example, where an injustice of this magnitude has been perpetrated the Government should consider using television time to acquaint people with the fact that they may have suffered wrongful deductions. That would be worth a gross of the pamphlets which lie unwanted and yellowing on the shelves and counters of the DHSS and post offices. The use of the media to get through to the people who might be affected ought to be seriously considered.
As the Minister said, that last point is connected with the Supplementary Benefit (Requirements, Resources and Single Payments) Amendment Regulations, which are item No. 8 on the Order Paper. I accept that those regulations have some good points such as the abolition of the invalidity trap, the capital disregard of life assurance policies and improved benefit for the single homeless and we welcome all those. Nevertheless, two major features will compel us to vote against them tonight. The first is the tightening of the rules regarding voluntary unemployment. The Minister rightly said that there was a 40 per cent. reduction which could be reduced to 20 per cent. if there was evidence of hardship. There were five criteria of hardship—serious illness or pregnancy, a child under five, housing requirements not fully met, the last job having been held for less than six weeks, and earnings from the last job being less than supplementary benefit requirements. Those criteria have now been reduced to one — serious illness or pregnancy. The other four have been wiped out and are no longer to be taken into account.
The Minister said that when the regulations were formalised rather than discretionary there was a vast leap in the number of cases that suffered lower deduction, and that is true. The reason for that was that the Supplementary Benefits Commission's guidance on this subject was being ignored in the offices and it was the formalisation of the regulations which brought it to the attention of the staff.
I intend to advise the House to reject the regulations for a number of reasons. First, the social security advisory committee has advised against proceeding with the regulations in their present form. The social security inspectorate, in which the Minister has great faith, has redefined hardship until it amounts to destitution. The person must be without food or essential services. The SSAC thought that to be a too restrictive definition.
The inspectors, who examined 208 cases, reached the conclusion that each one of them could have suffered a 40


per cent. deduction from his unemployment or supplementary benefit without hardship. Therefore, if the Minister relies on the inspectorate, there is no need for a 20 per cent. rate—everyone should have the full 40 per cent. The inspectorate is quite wrong to put such a harsh definition on hardship and to follow that definition with such insensitivity.
The second reason for voting against the regulations is the past maladministration in the current more liberal scheme. We all hope that the Minister's intervention will end that. But until we are convinced that there is no possibility of a repetition of that maladministration, we should not change the rules to make them harsher.
The third reason is that there is no provision for additional staff, which is the only way to avoid past errors. Further staff cuts will make the administration of any scheme much more difficult.
The Minister thought that the need to make a deduction for voluntary unemployment was self-evident. Having looked at the SSAC and inspectorate reports, I am not sure why the regulations exist. I know that they are hallowed by history, but that does not prevent us from examining them. The Speenhamland system was once hallowed by history, but it did not prevent the Poor Bill from being passed.
Are the regulations being used as a deterrent to people giving up their jobs voluntarily? An SSAC survey shows that more than 75 per cent. of those who had given up their jobs voluntarily did not know that a penalty was involved. Even when they were told about the penalty, the majority said that they would not have changed their decision.
Are the regulations being used as retribution —revenge upon those who have given up their jobs and, more importantly, revenge on their families? It is an example of punishing the children for the sins of the father. Such a doctrine presupposes that the New Testament was never written. The regulations are obnoxious.
Another blot on the regulations is the charge for board and lodging, and especially the abolition of the discretion to meet high charges when it is unreasonable for a person to move. To justify that, the Government said that certain organisations were abusing the provisions, especially those involved in the rehabilitation of alcoholics and drug addicts. The Government have named only one organisation, Turning Point. Are there others, and if so what are their names? Could not the abusers of the system be punished without also punishing the innocent? How many people will lose benefit because of the change in the regulations? The Minister was careful to skirt that point.
The regulations are defective because the local limits on which they so crucially depend are wholly inadequate. They force homeless people to be dependent upon poor quality accommodation. That leads to the sort of problems that occurred in Oxford which resulted in Operation Major.
The Secretary of State has promised a positive response to the SSAC's suggestion that guidelines should be laid down. Before we support any changes, we want an assurance that the guidelines will be strictly enforced. It is no use laying down guidelines that will be widely ignored. All those entitled to long-term rates of benefit are excluded from the regulations. The largest category of those dependent on the long-term rates are single parents.

We all know that accommodation willing to accept children is usually very expensive. People do not like the hassle, noise and inconvenience of children.
The SSAC has voiced a suspicion held by many of us that unscrupulous landlords are exploiting both the misery of the homeless and the DHSS. Given the scale of departmental involvement with men, money and time in the problems that arose in Oxford, I was dismayed to read the Secretary of State's response to the SSAC report which was dismissive and wholly unconcerned about unscrupulous landlords.
The main purpose of today's debate is the uprating of benefits in November. We shall not vote against the uprating regulations; that would be neither right nor reasonable. However, let no one imagine that because we shall not vote we think them adequate. They are wholly inadequate to meet the needs of pensioners, the unemployed, the sick and the disabled. In most cases the increase will be 3·7 per cent. The historic method has been applied and May was chosen as the base month. I shall not argue about the theoretical justification of the historic method. I have never been interested in theory; my interest is in the practical effect of changing the regulations. The Government have a duty to ensure that changes do not hurt the recipients especially when the uprating is decided before the rate of inflation is known.
I wish to deal with the Government's argument that any shortfall will be made good in the November uprating next year. It will not and it cannot. The 1984 uprating is designed to provide for those in receipt of benefit between 1984 and 1985. It is not designed for those in receipt of benefit between 1983 and 1984, and it is not backdated to accommodate them. It cannot make good the benefit lost in 1983–84, even for those still on benefit in November 1984. It most certainly cannot make good the loss for those no longer receiving benefit in November 1984, or for those who have died in the meantime.
The loss suffered by the shortfall below the rate of inflation will be permanent. For example, a single retired invalid will receive 75p a week less than he would have received had the increase been in line with the likely rate of inflation. A married couple will have £1·25 less; for the unemployed it will be retrospectively 55p and 85p; for those on ordinary supplementary benefit it will be 60p and 95p; and for those on long-term supplementary benefit it will be 75p and £1·20.
There are ways in which that loss could have been made good and people protected against the loss this year. For example, two weeks' benefit could have been paid to them, or a general Christmas bonus could have been given to all in those categories. Instead, the Government have chosen to do nothing about it. We criticise the Government not just for the change of method but for their indifference to the harm that their choice will cause.
That is not the whole story, because for millions on supplementary benefit, being a means-tested benefit, their income is reduced if they have another source of income, provided that it is not disregarded. There are many income disregards for people on supplementary benefit. Unless the real value of those disregards is maintained, their real income is being reduced year after year because the disregard is less in real terms each year.
Consider, for example, war pensioners. They had their income disregard fixed at £4 a week in 1975. It is still £4 a week and there is no proposal in these uprating benefits to change that. Today's equivalent of that £4 is £9·50.


Consider a disregard which should be dear to the Minister's heart, the education maintenance allowance. That disregard was fixed in September 1979 at £7·50. To have maintained its real value, it should now be £11, but it has not been and will not be uprated. I have received letters from local education authorities pointing out the dilemma in that any increase in that allowance, beyond the disregard of £7·50 a week, will not benefit those families who are in receipt of supplementary benefit. That is a great weakness in the uprating system. The Government should do something about it because it means a steady erosion of the standard of living of those receiving these benefits and other benefits to which I have not referred.
What about the 5 per cent. abatement of invalidity benefit, sickness benefit and maternity allowance? That was fixed at the same time as unemployment benefit in lieu of a scheme of taxation, yet it is still in operation and there is no sign of the Government devising a scheme to tax those benefits. I repeat what I have said on previous occasions: it is time that the Government either came forward with a scheme to tax those benefits or otherwise restored the 5 per cent. abatement. At present the system is penalising people who would not pay any tax. It is doing so in a blanket way and therefore in a cruel manner.
To summarise, even before the £5 billion in further cuts which are now mooted, the inadequacy of the increases for those in receipt of social security benefit means that the year ahead will be harder for them. Any additional cuts will add to their misery. We have been the recipients of many ringing declarations by the Secretary of State of his eternal devotion to the welfare state. It is to be hoped that the Minister of State does not get too close to him, and particularly that he does not give away the few remaining copies of the document to which reference has been made, most of which will have been burnt by sensible people anyway. The name of the document is appropriate — "Down with the Poor". Nothing epitomises the Minister's attitude more than that title.
What we want from the Secretary of State is not so much eternal devotion to the welfare state as eternal vigilance because the latest cuts, like the previous ones, will diminish the quality of the service for millions of recipients and devalue it in the eyes of millions more. The Secretary of State must fight his war against the press-leaked £5 billion, but nothing he does about that will remedy the lower standards that have resulted from Conservative policies in the past four and a half years, the heightened misery and the widening needs of millions of our fellow citizens. Unless the Government face that weakening of the welfare state, they will destroy it, and it will be death not in one fell swoop but from a thousand blows. I believe that the Minister of State has been placed in the Department to be the blowmaster-in-chief.

Mr. Gordon Brown: Having listened intently to the Front Bench speeches, I am grateful for this opportunity to make my first speech in this Chamber. As I represent a constituency in which there are now more men and women without a lasting job than there are people employed in manufacturing industries, and as one in seven of my constituents is dependent on means-tested benefit, it is appropriate that I should make my maiden speech in a debate on social security.
I am conscious of the debt that I owe to my two colleagues and predecessors, my hon. Friends the

Members for Fife, Central (Mr. Hamilton) and Dunfermline, West (Mr. Douglas), who have shared and so dutifully discharged to the people of Dunfermline, East the responsibilities that it is now my privilege to undertake. Relatively few new hon. Members can enjoy the company and support of their predecessor, especially on the Labour side. To few indeed is it given to enjoy the company and support of two, and especially two who share my view — the view of the Labour party — that the greatest threat to the ideals of individual freedom and personal responsibility that the present Government so stridently espouse, the grossest affront to human dignity and the gravest assault, on any view of social justice, is mass unemployment and its inevitable consequence, mass poverty.
The people of Dunfermline, East know about unemployment and poverty. They live in a constituency which was once at the heart of the mining industry: 30,000 miners were employed in 66 pits in the county of Fife in 1913; 20,000 miners were employed in 33 pits even in 1947; yet today there is not one pit in my constituency, and only six in the county of Fife.
However, the people of Dunfermline, East know also that, as the older industries have declined, the newer industries—petrochemicals, electronics and computers—have not yielded the jobs that were promised or expected, so much so that the official figure for unemployment in my constituency is now no fewer than 4,000 people, a figure which obscures a larger truth, as hon. Members are well aware; there are nearly 6,000 men, women and teenagers without a lasting job worthy of the name.
Dunfermline, East is a constituency of small communities, villages and towns, the largest of which has a population of no more than 12,000. Community by community, village by village and town by town we can see how the mass casualties of the Conservatives' economic war of attrition translate into human disappointment and suffering: nearly 400 out of work in the one small village of Kelty; 530 out of work in Cardenden, Kinglassie Bowhill and Dundonald, villages in my constituency; 800 out of work in Cowdenbeath and Lumphinans; and 1,000 out of work in Lochgelly, Ballingry and Lochore. Even in the more prosperous communities of Aberdour, Dalgetty Bay, Rosyth with its dockyard, and Inverkeithing, in my constituency, there are now more than 1,000 people officially registered as unemployed.
These local figures—a new arithmetic of depression and despair—came to me almost by accident. They are available only on request from the Manpower Services Commission; they are not routinely published or made public. Until such time as the Government recognise that unemployment is the disease and not the cure for the disease, until they accept the blame for continuously rising unemployment as freely as they solicit the credit for inflation's temporary fall, I shall ask the Secretary of State for Scotland, month by month, village by village, community by community, to publish these tragic tolls of the unemployed so that the total numbers become, for each village, visible and specific for all to see.
It was almost by accident that I discovered the true but unpublished figures of the number of claimants of supplementary benefit in my constituency. Last month there were 3,300 claims in Cowdenbeath and 4,500 in the Dunfermline area. That means that no fewer than 15,000 men, women and children in the Cowdenbeath and


Dunfermline areas depend on means-tested benefits for their livelihoods. In five years the numbers of those claiming benefits as a result of unemployment have doubled.
The statistics for Scotland as a whole reflect this trend. In 1979, 405,000 people were dependent on supplementary benefit. There are now 750,000 men, women and children depending entirely on means-tested benefits—one in seven of the population of Scotland. Even these figures underestimate the extent of poverty in Scotland. If we include the low-paid and their families and those who could but do not claim, including an estimated 3,000 pensioners in my constituency, the number of people living at or below the Government's poverty line in Scotland is more than 1 million—one in five of the population.
I do not know how Conservative Members can tell pensioners in their constituencies or in mine that they can purchase, even after the November uprating, sufficient basic necessities on incomes of less than £5 a day. I shall have to return to Fife to tell my constituents that the £1·20 that pensioner couples were expecting has been withdrawn, because the Government have cynically chosen to change the basis of the uprating precisely at a time, when, as prices start to rise, pensioners will be most penalised.
I will also have to tell the unemployed with families of four that they are expected to live on incomes of £59·20 a week. This is all because the Government's philosophy is that the rich must get richer by way of tax cuts and that the poor must become poorer to ensure true prosperity. Perhaps Conservative Members are not aware that supplementary benefit for the unemployed, when set against average earnings, is now at a lower level than the national assistance board rates of 1948. Perhaps they are not aware also that the level is now dwindling to the poor law rates of the 1930s. If we are to believe the statements made by the Chancellor of the Exchequer in recent weeks, it is his intention to push these rates down even further.
I ask the Minister for Social Security whether he is prepared to accept that if the supplementary benefit budget were to rise only in line with inflation, if pensioners were to be protected against inflation and if, as the Government accept, unemployment were to rise to 3·4 million by April next year, the cuts in the level of supplementary benefit rates for the unemployed that would be necessary to balance his budget would be about 6 per cent. by 1985, a cut of about £1·65 a week in today's terms.
If the budgets for supplementary benefit and for social security are to be cut in real terms by 4 per cent., as is hinted in some newspaper articles, if pensioners are to be allowed an increase in line with inflation while the unemployed are not, and if unemployment, as some of us fear and as some economic commentators suggest, is to rise to 4 million by 1985 or 1986, the cuts in supplementary benefits for the unemployed needed to balance the budget will be about 25 per cent., a loss of about £6·25 a week at today's prices.
I expect detailed answers to these questions. It is my intention to pursue them until the consequences to the unemployed of the proposed spending cuts are made clear.
It appears that the Government are saying that the problem, as they see it, is no longer unemployment but the unemployed. They seem to be suggesting that benefits as

low as £26 a week are deterring the unemployed from seeking jobs. They are implying that in future benefits should be set at a level that will not even permit a minimum of dignity and comfort. They are apparently suggesting that they should be lowered to a level that will be only a fraction or proportion of the lowest wages in the market place, irrespective of whether such wages can offer or guarantee subsistence.
What is the case for the so-called incentive approach to unemployment? What is the economic case that is now being advanced by the Chancellor of the Exchequer that benefits should fall? According to the Institute of Fiscal Studies, which is not renowned for its support of the Labour party, there is no case to answer. It states in its most recent study that only one in 40 receive more in benefits than they would have received in work. According to the erstwhile supporter of the Government, Mr. Samuel Brittan, there is no case to answer. He tells us that there is "a logical as well as an ethical flaw" in the case for cutting benefits. There is no case to answer if we are to believe the Secretary of State for Social Services. When addressing the Sub-Committee that was considering these matters in July 1982, he said that there was no evidence that existing levels of benefit deterred the unemployed from seeking work.
There is no case for cuts if we are to believe what the Minister told the House on 11 July in answer to a question. He said that he expected to find in a new survey of the unemployed that there would be lower proportions of unemployed people better off on the dole than even the minimal 6 to 9 per cent. as shown in the 1978 survey. The Government's evidence is in sharp contradiction to what is being said by Professors Minford and Walters, and even to what the Chancellor of the Exchequer is saying. It is up to DHSS Ministers to point this out to the Chancellor.
The debate about the so-called unemployed trap, and the so-called incentives that it is claimed will be needed to get the unemployed back to work, is designed to obscure what everyone knows. If there are no jobs, no amount of poverty and no degree of destitution will create jobs where none exist.
The chance of a labourer getting a job in my constituency is 150 to one against. There is only one vacancy in the local careers office for nearly 500 teenagers who have recently left school and who are seeking jobs. Against that background I must ask where we are to find the so-called jobs about which the Chancellor talks. He says that they could easily be found, but they are not in the private sector, according to the National Economic Development Council, which says that employment in manufacturing industry will not rise until 1990. The jobs are not in the public sector either if we are to accept the CBI's idea, with which the Prime Minister agrees, that we could lock hundreds of thousands of jobs away from the public services.
Where are the jobs that the Chancellor, a member of a Government who say that incentives are needed to get people back to work, is talking about? When pressed on this matter in the 1930s, one new Tory Member representing a Scottish constituency told the unemployed miners in the upper wards of Lanarkshire that there were plenty of jobs for them in London as domestic servants. Perhaps the Minister for Social Security has an answer to the conundrum. Does he still believe what he wrote in


"Centre Forward" in 1978? Does he still believe that there are plenty of jobs around for the unemployed as window cleaners? He wrote:
I shall believe that there is a shortage of jobs when two window cleaners call for my custom in one week, one month or one year.
Perhaps the Government's answer to mass unemployment is for Britain to become a nation of window cleaners. In the same book, "Centre Forward", the Minister wrote that, to become a window cleaner,
little equipment is needed—a bucket, a leather or two and a ladder.
When the Prime Minister talked regularly during the election about ladders of opportunity, I had not realised that the next Conservative Government would have something quite so specific in mind. Perhaps the Minister is to do for ladders what the Secretary of State for Employment has done for bikes. Perhaps the exhortation "Up your ladder" will become as intellectually compelling as a solution to unemployment to Conservatives as "On your bike" was in the previous Parliament. The truth is that if no real jobs are to be found, to cut unemployment benefit is not, as the Chancellor was trying to imply, a necessary act of economic policy. It is an act of vindictiveness to the poorest in our community.
I direct the attention of the House to the regulations and the report governing voluntary unemployment deductions. Whether or not the Government will admit it, they are proposing and enshrining in the regulations a new definition of the national minimum, a new poverty line and a new safety net. They are saying that normally when someone voluntarily leaves his job, he will receive no more than about £15 a week for six weeks. The Government say that that involves no hardship because he will not starve or be destitute. I remind the House that four years ago the Conservative Under-Secretary of State for Health and Social Security said:
It is not sufficient to assess poverty by absolute standards.
She said:
Poverty must be judged on relative criteria, by comparison with the standard of living of other groups in the community.
She said:
Beneficiaries must have an income that enables them to participate in the life of the community.
She rightly observed that it is not enough not to starve; people should be properly fed. It is not enough to avoid destitution; it is necessary that all have tolerable accommodation. It is not enough to avoid dying from hypothermia; it is necessary that all have adequate heating. It is not enough to become a prisoner, by virtue of poverty, in one's own home; it is necessary that people have the resources to travel and to visit friends and relatives.
What the Government are doing today, in these regulations on voluntary unemployment deductions, is introducing a new definition of the national minimum. Anything short of starvation and anything above destitution is acceptable. When talking about an income of £15 a week the report states that it does not matter that debts cannot be repaid or accumulate, nor that hire purchase payments cannot be met; all that seems to matter is that people do not starve or find themselves destitute. In other words, the national minimum is to be equated with absolute destitution.
The Secretary of State for Social Services and the Minister for Social Security will say that the voluntarily unemployed are a special case, that they deserve nothing

better than an income that provides a few calories above the starvation level. I remind the Minister that the 1942 Beveridge report, in less affluent conditions, recommended that the voluntarily unemployed should enjoy the same level of national assistance as other unemployed and should not be penalised and put on hardship incomes, such as those that are being regulated for today.
This evening, we are seeing nothing less than regulations for the creation of poverty and for protection against nothing but absolute destitution. Perhaps there are Conservative Members who believe in that sort of poor law regulation. In his new post will the Minister still subscribe to the views that he has expressed in his books "From 1985", "Centre Forward" and "Down with the Poor", that the welfare state should come under the surgeon's knife, that the only proper recipients of welfare aid are the destitute and the deranged, that the remainder of social services—health, education and social work—should be bought and sold on the open market? Worse than that, he has recommended that a basic work test should be imposed on the unemployed. They should be put to work on roads, municipal parks, clearing waste land and even the beaches.
I remind the Government that the Prime Minister's earliest and most esteemed mentor, Sir Winston Churchill, was appalled by what he saw as the manifestation of Victorian values—values that the Minister represents—and was impressed by what he saw as the connection between
the harsh excess of accumulated capital
and
the gaping sorrows of the left-out millions.
He was so concerned that when the state intervened it was not injuring rights, but righting wrongs, that he sponsored and never recanted from the minimum wage and the school meals legislation, the labour exchanges and the social insurance schemes that are now under threat from this Government. Sir Winston Churchill said:
The state must increasingly and earnestly concern itself with the care of the sick, the aged and the young. The state must increasingly assume the position of the reserve employer of labour.
Opposition Members are entitled to ask what has happened to the Conservative party when the Minister for Social Security can talk about himself as being the "Centre Forward" and when the spirit of Sir Winston Churchill is relegated to "outside left".
The House was told in 1948 that the welfare state was created to take the shame out of need. Is that principle to be overthrown by an ever increasing set of Government assaults on the poor that are devoid of all logic, bereft of all morality and vindictive even beyond monetarism?

Mr. Alan Haselhurst: I am happy to start by complimenting the hon. Member for Dunfermline, East (Mr. Brown) on his maiden speech. He will have impressed the House with his force and fluency and the wit he introduced into a powerful political speech. He has shown that he will be at least the equal of his predecessors in representing his constituents' interests. We look forward to hearing him again and having the opportunity to debate with him. He will undoubtedly be a worthy opponent.
I am interested in the Supplementary Benefit (Requirements, Resources and Single Payments)


Amendment Regulations 1983. I am a member of the council of management of Turning Point, which has already had a mention, if not a glorious one, and I have a special interest in the care of alcoholics and drug addicts. The wider question which arises in a debate on these amendment regulations relates to how we should support those unfortunate people who, through an excess of drugs or alcohol, need therapeutic treatment or some personal care.
I understand the argument advanced that support might more properly be the role of local authorities and that supplementary benefit ought not necessarily to play a major part. However, we should be less than honest if we did not acknowledge that this group of people falls between two stools. Although in theory local authorities should be providing support, in practice most of them are not. That has nothing to do with the authorities' political persuasion. A great many authorities are supportive, whether they are Labour, Conservative or otherwise controlled. Alas, many more either do not recognise it as a problem or do not believe that they can afford to support it. They may not wish to acknowledge that they have these social problems.
I am worried — this worry was expressed by the social security advisory committee in its report—that proper attention will not be paid to alcoholics and drug addicts if the amendment regulations are approved and we are left with the supposed support of local authorities whose expenditure is already under great pressure.
The amendments effectively abolish regulation 9(5). No one knows what the effect of that will be. The Department has said that few people should be adversely affected. If that is so, one wonders why it was necessary so hastily to close the door which it was felt had been opened to an excess number of claims or to excessive claims.
I am sorry that the hon. Member for Pontypridd (Mr. John) referred to Turning Point as a guilty organisation. I have not been told that by the DHSS. I thought that the charges in the various institutions run by Turning Point, which average £100 a week, were well below the levels that it might have been possible to claim under regulation 9(5).

Mr. John: All that I said was that the only organisation that I heard mentioned was Turning Point. I asked that if there were specific allegations, they should be named, in justice to the organisation.

Mr. Haselhurst: I am grateful to the hon. Gentleman. I hope that when my hon. Friend the Under-Secretary of State replies he will exonerate Turning Point, which is the right thing to do.
The effect of abolition is unknown. It is not clear that a large sum is involved. If the Department believes that few people would be adversely affected, one is tempted to akd why such extensive changes should be made. The social security advisory committee recommended further discretionary underpinning—a sort of safety net—so that anyone who, by some mischance, loses as a result of the changes in the regulations can be caught. That has not been accepted by my hon. Friends. Perhaps they prefer to proceed by making a survey. If that is so, I ask them to make sure that it is done with all speed. The danger is that if people who have suffered are identified they will have

suffered in the meantime and it may be difficult for them to catch up and be provided with the benefits that they deserve.
I should like to ask my hon. Friend in which category among those listed in amended regulation 2(7) institutions and hostels run by organisations such as Turning Point will be found. Will the three categories listed be a sufficiently comprehensive range of categories? Should there be a separate category for institutions that are attempting to provide therapeutic treatment and personal care for alcoholics and drug addicts? I am not sure whether, even if Turning Point's institutions were placed in the most favourable of the three categories for the determining of local needs, that would be the right category. Perhaps it should be put in a special category of its own. I hope that great attention will be paid to and that there will be close monitoring of the determination of the local limits so that the people who are resident in those institutions will not suffer.
I should like to press my hon. Friend about the special needs allowance, which is included in the amendment regulations. The figure mentioned is £15·35, which is an extension of the limits. However, it applies across the board. In all, eight categories are covered. I maintain that special circumstances for alcoholics and drug addicts might merit a special category of extra special need. The £15·35 is not necessarily the right amount. The figure for drug addicts and alcoholics should be specifically tailored.
One further specific point, which is perhaps less important in some respects, is the transitional provisions in regulation 5. I cannot see any obvious or logical reason why hostels for drug addicts and alcoholics are specifically excluded. One might be forgiven for supposing that that appeared slightly vindictive. If the Department's argument is that very few people will be adversely affected, why not guard against even that possibility by allowing the transitional arrangements to apply to those who are in hostels for drug addicts and alcoholics? That is a reasonable point. I hope that my hon. Friend will help on that matter even if he can meet me on nothing else.
In short, we are dealing with a group of citizens who deserve proper attention. The scale of the problem is not sufficiently recognised throughout the country, certainly not by the local authorities upon which the Government would like to pin the major responsibility for support. We are failing in our duty if we do not attempt to recognise the problem and meet it in a proper manner.
The social security advisory committee stated in paragraph 17 of its report:
We can therefore only urge the Department, whose wider responsibilities do indeed include the formulation of policy on drug and alcohol misusers, to try to ensure that the financing of provision for these vulnerable people does not slip between the competing expenditure priorities of local authorities and other funding bodies.
That is put powerfully and persuasively. I hope that those words will impress themselves upon my hon. Friends before they finally take their attention away from this matter.

Mr. Andrew F. Bennett: I too pay tribute to my hon. Friend the Member for Dunfermline, East (Mr. Brown), who made an excellent maiden speech. I am sure that the whole House listened with great pleasure to him, although he reminded us that in essence the regulations deal with the poverty of his


constituents and all our constituents. I congratulate him on choosing this debate in which to make his maiden speech. It is sad that, although many hon. Members are concerned about poverty, they are frightened off by the apparent complexity of the regulations and are reluctant to speak in the House. I congratulate my hon. Friend on his speech and look forward to hearing him again soon on the same issues.
I wish that I could congratulate the Minister on introducing the instruments, but I was disappointed at the way in which he presented them. Some people in education gibed that the only contribution that the Conservative party made to education in the 1970s was to move the Minister from being headmaster at Highbury Grove. They now follow that with the gibe that its only contribution in the 1980s was to move him from the Department of Education and Science. That is unfair. At least in the Department of Education and Science the hon. Gentleman was one of the few Ministers who could say that he had been to the chalk face and had some practical experience of education.
I should have liked the Minister to tell us today that he had some practical knowledge of what poverty is about. A Minister with his responsibility should have said to us that many people are living in poverty, and added that he was sorry that the Government could not afford to do any more for them. If the Minister had done so, we would have had a little sympathy for him, but he missed the opportunity to put across the message from his Department and from the Government that there is large-scale poverty. If the Minister is not prepared to put across that message, what chance does he have of fighting the Department's corner in the Cabinet and saying that benefits should not be cut further?
It may be 10 years since the Minister ceased to be a headmaster, but he will remember the pupils whom he taught who lived in poverty. In his constituency he would see many people struggling to get by on benefits. School holidays are a frightening prospect for many one-parent families and the unemployed. There is no chance of their taking their children away for a holiday. They would be lucky if they had a one-day trip somewhere. A continual problem for them is how to give the children enough to eat. Unfortunately, partly as a result of the Minister's previous activities in education, the provision for school meals during the summer holidays has been dismantled in most local authorities. For people on benefits free school meals are a big help, but they stop during the school holidays. There is a problem of making ends meet so that there is enough for the one basic meal a day that the children usually get at school. There is also the dread of the ice cream van that comes round with its chimes ringing. Naturally, the kids are pushing for an ice, cream. When a person is in receipt of benefits, more often than not he has to say no rather than dig into his pocket to buy the ice cream.
All the kids are keen to see "Superman III", but parents living on benefits week in and week out have difficulty in forking out money for that. Many parents who are in work take for granted visits to the baths or to the bowling green or putting green in the park. Money for such activities is difficult to find if the household is living on benefits on a long-term basis. The Minister would have done a service to the House, the Government and the country if he had referred to those problems.
An instance of poverty in my constituency was shown when a pensioner visited me at my most recent advice bureau. She was worried. She needed a little extra money. She illustrated the oppression of getting by on a pension and a small amount of supplementary benefit. She had decided, because of the nice weather, to make the short trip from Denton in my constituency to Oldham using the concessionary bus fare. It was rather hot on the bus and when she got to Oldham she felt overcome by the heat and went into a café to buy a pot of tea. That put a strain on her income. She then visited the market, looked at the shops but did not buy very much. As she was returning to the bus stop she met an old friend with whom she had worked for 20 years. Naturally, they wished to talk, so they went back into the cafe and had another pot of tea. She made it clear to me that those pots of tea put a strain on her budget.
I could give many more similar examples. People who live on benefits face such problems. Very few hon. Members or people in work have to decide whether they can afford another ice cream for the kids or another pot of tea. They take such things for granted.
The Minister did not try very hard to justify the way in which benefits have been cut. He said that the Labour Government did the same in 1976. We have heard that argument from the Dispatch Box time and again. What was done then was wrong, and cutting benefits again is equally wrong. Two wrongs do not make a right. If the Government believe that what happened in 1976 was wrong, why did they not restore the money immediately they came to power in 1979? They did nothing, so they are now a party to the 1976 cut. They must accept that they cannot cover up for their cut in benefits of between 2 and 3 per cent. this year by referring back to 1976. We need justice for people on benefits, not a "yah-boo" justification that the Labour Government did it so it is all right for the Tories to do it. We must remember that people have great difficulty living on benefits and they need more money.
The Opposition will vote against the measure dealing with voluntary unemployment. It represents one of the worst areas of incompetence and inefficiency in the benefits system. I receive more complaints from constituents about the arbitrariness of decisions by unemployment benefit officers on whether someone left his job with or without justification than about any other aspect of the system. I am appalled at the time taken to obtain the basic information to make a decision, and the claimant's money is stopped while waiting for the decision. That is grossly unfair, especially as so many unemployment benefit officers show such complacency.
When a Member of Parliament contacts supplementary benefit officers on behalf of constituents, they show concern and do their best to give good service to the Member of Parliament and to the claimant. Unemployment benefit officers, however, seem arrogant about their supposed impartiality. That shows that most of them have never coped with living on benefits. They say that they sent a letter to the ex-employer which has not come back. Ex-employers must be given a fortnight in which to reply. If there was a row or a disagreement when the claimant left, it is not surprising that an employer is slow to reply. The officers then say that they must send a reminder. The thought of telephoning or trying to speed up the process leads them to throw up their hands in horror.
While the unemployment benefit officer takes his time making a decision, the claimant is deprived of money. The


benefit officer may say, "If in the end I decide that he left his job with justification, he will get the money back." It is essential that those who claim benefits should get the money when they need it. Most of them do not have credit cards or bank accounts. They cannot borrow vast sums of money to tide them over temporary periods of hardship. They have to use cash to buy goods.
As to the history of the voluntary unemployment deductions, the present Parliamentary Private Secretary to the Prime Minister, the right hon. Member for Selby (Mr. Alison), first put them into statutory form. The House was assured that the Government would treat hardship cases with compassion and concern. As the number of hardship cases is continually whittled away, only a small category will qualify for that benefit.
What is hardship? The inspectorate's report attempted to define it. It said that hardship meant that somebody was going without food or essential services. Does that mean that the electricity or gas bills are not paid? Does it mean that the kids do not have an ice cream during the school holidays or that they do not have replacements for worn-out shoes? The inspectorate did not make any objective test. It just gave its impressions. It would be simple for a Government to institute some independent research on this subject, but the present Government simply take their beliefs in some vague way from the inspectors' reports.
The uncertainty about the hardship allowance affects most harshly those of my constituents who try to improve themselves. It does not affect those who make little effort. Two of my constituents who were desperate for jobs were persuaded to take canvassing work. The job sounded impressive. They were told that they would receive a commission, but they discovered very quickly that it was impossible to earn the money promised. In the end, through desperation and the poverty that the job produced, they decided to give it up. Having been conned by the employer, such people are then caught by the regulations. The message to them is not to go after the hope of a job because they are better off staying on benefit. If they go after a job and it does not work out, they are penalised.
One-parent families also face difficulties when trying to cope with a job and the children. Having obtained a job, the first thing that happens is that one of the chilren becomes ill, the child-minding arrangements fall through and the job has to be given up. An official then makes a 40 per cent. cut because he considers that giving up work was not essential. The Government must investigate the way in which people are penalised for getting a job which for some reason does not work out. It is unfair that those who make no effort suffer less.
The Government must examine their administration carefully. They must tell every unemployment benefit officer to make decisions quickly, within a week, on whether somebody left a job voluntarily. If he wishes to appeal, he must be able to do so within three weeks. We all know how long appeals take to be heard. If an appeal is successful, the money must automatically be repaid straight away. When the benefit officer decides that the person left a job for genuine reasons and should not be subjected to a deduction, that person should get the money back quickly.
We are retracing our steps over unclaimed benefits. Most of the information that we now receive from parliamentary answers shows that there is another area of

unclaimed benefits that the Government are doing little about. In 1979, £360 million in benefit was not claimed. We have still not had an updated figure. I hope that the Minister will tell us how much benefit is unclaimed.
I should like to deal briefly with the board and lodging regulations. CHAR has made representations about the utterly illogical way in which those who are completely homeless get no money for personal expenses, whereas those who take board and lodging receive benefit. No doubt the Minister has received a long submission from CHAR. What will he do about its suggestions?
Another little meanness is the linking rule. The 13 weeks might have been a little harsh for some people, but to cut that to eight weeks means that those who want to get back into work or to get back together as a married couple will be affected. If those people try to make a go of it, they will be unable to return to the long-term supplementary benefit rate after eight weeks but will have to do another 12 months of working their way up from the short-term rate to qualify for the long-term rate. That is a harsh change which the Government cannot justify.
I should like to give the Government just one message. Poverty in Britain is increasing. The real problem is that parallel with that poverty runs increasing affluence. We must do something to achieve equality. It is all too easy for hon. Members to go down to the Terrace or watch people going to a garden party and reflect that it is an odd society in which there are many people who spend more on a hat today to go to a garden party than others have to live on for a week.
We should try to create a society that cares more and has far more compassion for those who have nothing and need benefits. Ministers should be making it clear that we are not doing enough for the poor, that we want to do more and that, as soon as the opportunity arises, they will be pleased to make the necessary regulations. They should not be suggesting that we can cope with more cuts in benefits next year, especially for the unemployed.

Mr. James Couchman: I am surprised to be standing here defending social security upratings that are as fair and, in some cases, as generous as those that we are discussing. When the economy is just beginning to gather momentum after a severe worldwide recession, it is remarkable that the Government have felt able to raise several benefits by more than the rate of inflation—some to their highest ever level of purchasing power. Foremost is child benefit, which affects 7 million families and 12·8 million children, and one-parent benefit which affects 500,000 families and 810,000 children. The valuable supplements to those two benefits will mean that they have more than doubled in value since 1979.
Our pre-election pledges to the elderly and the disabled have been redeemed.

Mr. John: Does the hon. Gentleman recall that the failure to keep the real value of child benefit at the 1979 level means that families have lost £80 for each child and that even the present uprating barely restores in real terms what the benefit was worth when the Conservatives came to office in 1979?

Mr. Couchman: I am grateful to the hon. Gentleman for his information. That does not apply to one-parent benefit.
Since November 1978 the retirement pension has more than kept pace with inflation. Moreover, there has been a dramatic 7 per cent. increase since 1978–79 in the number of people who draw retirement pension. A record £350 million will be spent on special heating costs this year. Long-term benefits have been protected against inflation and the abatement in unemployment benefit, about which many were uneasy, has been restored. Therefore, people drawing unemployment benefit will receive an increase of more than 8 per cent. from November. The benefit will be higher in real terms than when the Government took office in 1979.
There has been a massive increase—21 per cent. above the rate of inflation—in cash benefits for the disabled and the long-term sick. Such benefits have increased from £1·73 billion in 1978 to £3·37 billion in 1982–83. Mobility allowance is now paid to nearly three times as many people as it was in 1978 and there has been an increase of 47 per cent. in the number of those receiving attendance allowance. Both of those benefits have been increased by far more than the rate of inflation.
I am astonished that I should have to defend upratings of that size. Opposition Members incessantly wheedle and howl for more to be spent on social security benefits. I am surprised that they have yet to tell us what they would have done had they won the general election. The truth, however, is that they did not win that election. Indeed, they suffered what must be the worst electoral defeat of a major party for 50 years. The reason for their defeat was in no small part due to the credibility gap between their policies and the real world. People simply did not believe that their policies were practical. One of the subjects over which there was greatest distrust was their policy on public expenditure and their attempted bribes with the social security budget. They suggested giving a bit more to this group and a bit more to that, to spend, spend, spend without giving any consideration to where that money would come from. The Labour party has always been able to be compassionate and to care passionately, with someone else's money. Care comes cheap when the other fellow is paying. The Labour party scores 10 on the Richter scale for care, but it gets a big fat zero for economic realism.
Although there are many needy people whom we wish to benefit by the upratings that are proposed for November, it is proposed that for those who leave their jobs for no good reason there should be tightening of the regulations. Several hon. Members have referred to that tightening. It is sensible. The vast majority of the people concerned are young, or very young, and give up their jobs with remarkably little thought about what they are doing.
I had not been in the House for more than about two weeks when I found myself being catapulted to an unwanted prominence in the News of the World. I hasten to add that it was not for any of the usual reasons that one finds oneself in that worthy journal. It was because a young pair of teenagers had left home and taken up residence together—I had better be a fide careful about unparliamentary language—in a substantial flat in my constituency. They were manipulated by an extremely unscrupulous landlord into claiming board and lodging allowance rather than rent. They also received some pocket money from the DHSS and were reported in the News of the World as enjoying an income of £110 a week courtesy of the DHSS. Neither of those two workshy youngsters has any need or inclination to seek work. It is

not surprising that I was deluged with letters from angry pensioners from all over the country as a result of my expression of concern. Some regulations must be tightened.
The statutory instruments uprating the social security benefits are complicated, and I must have recourse to the brief that has translated their effects into English. The complication is symptomatic of the system. The social security benefit system is a bag of snakes that is not understood by the claimants and barely understood by many of the officials who administer it. The DHSS pamphlet attempts to explain which of no fewer than 60 cash benefits one may claim — means-tested, non-contributory and national insurance. The time has come for us to look more fundamentally at simplifying the system by the introduction of a tax credit system or a negative income tax system. The complexity of the present system, combined with its apparent inequities, brings the system into disrepute. This evening's debate is not the time to dwell on the prospects of a more simple system, but I hope that before next year's uprating debate some more basic thought will have been given to the entire social security system.
I end as I began by saying that I am astonished that I must defend upratings that are as fair and generous as those before us today.

Mr. Archy Kirkwood: I present my credentials to the House as the Liberal party's parliamentary spokesman on taxation and social security only a few weeks after I presented my credentials to the House as the new Member for Roxburgh and Berwickshire. I look forward to the arcane debates to which the hon. Member for Stockton, South (Mr. Wrigglesworth) referred. This is a complex subject, but I look forward to getting to grips with it and to participating in future debates.
I do not understand the analysis made by the hon. Member for Gillingham (Mr. Couchman) of the success that he claims for the instruments. The statistics that are bandied about during such debates are always essentially flawed. The family expenditure survey, which generates those statistics and the retail price index, measures the expenditure of households on goods and services. Some of the data are flawed because they are based on average families. However, the basis does not apply in many parts of Britain. The Scottish borders is a rural area with little agriculture and services, and a low-paid hosiery industry. Many of the national averages are wrong because they do not take into account those who cannot economise and budget properly, as they receive only supplementary benefit rates of income. People cannot travel because there is a disproportionate expenditure on transport. They must also pay interest and legal charges when their electricity is cut off and they are sued in the local sheriff court. I must tell the hon. Member for Gillingham that far from the south-east of England the people suffer greatly. The increases do not reflect the circumstances of rural areas.
I agree with the hon. Member for Gillingham that the system is complex. However, the Liberal-SDP alliance has a straight forward answer to the problem, which is to bring together taxation and social security in a unified benefits system called the tax credit scheme. Several people have applied their minds to the operation of such a scheme, and if hon. Members are interested in details I refer them to


the third study report of the Treasury and Civil Service Select Committee. It considered the matter in some detail, and I commend the recommendations and summary conclusions, which are in favour of considering a unified taxation and social security system. That would solve some of the problems that have arisen in the interaction between the tax system and social security benefits.
As a local solicitor who dealt with social security matters, I have come to the conclusion that the Government must change the system because they are shoring up an edifice that is held together more by the good faith of those who operate it than by anything else. If they continue to shave off money while they are running a defective bureaucratic system, in the long term they will run into serious difficulties.
The Opposition do not share the Government's overall economic view. We believe that much more money should be devoted to financing the social security system, although we would ensure that the money was channelled in a direction that benefited special groups so that we could limit any increases in expenditure required to finance the increased benefits.
I was confused by the Minister's statement that the value of benefits will remain the same under the new system as they were under the old system of arriving at the increase in benefits. Perhaps the Minister will tell me later whether my analysis of the system is right. The old system of assessing the increase operated from November to November. If that is true, we must ensure that the benefits obtaining in November 1982 have a similar value in November 1984. Under the old system the benefit assessment period was from November 1982 to November 1984. Under the new system brought in by the Social Security and Housing Benefits Act 1983, the reference period will be May 1982 to May 1984. The common period runs from November 1982 to May 1984. During the six months between May 1982 and November 1982 the increase in the retail price index was 1·3 per cent. The old system forgets the six months between May 1984 and November 1984. If the increase in the retail price index between May 1984 and November 1984 is more than 1·3 per cent., it is self-evident that those who have received the increase have lost overall.
On 9 May my noble Friend Lord Banks in another place referred to that anomaly and said that it would leave people worse off than they would have been, which is different from what the Government are saying.
Indeed, Lord Trefgarne wrote to him as follows:
I write to confirm that, as you said, the difference between the two review periods will depend on the difference between the rise in prices in the period May to November 1982—which we know to be 1·3 per cent.—and the corresponding movement between May *and November 1984".
It is not true to say that the increase will be wholly made up. For the reason that I have just given, I believe that under the new system people will be much worse off.
We shall look carefully at the increases that the Government will bring before the House during the remainder of this Parliament. We are watching with great interest the public expenditure battles that are now taking place in Cabinet. If next year the Minister tries to do another patch-up job by shaving off expenditure at the expense of the poor, he will be in even deeper trouble. The Government must take the opportunity now to recast the whole system of social security benefits and to move in the

direction of a properly worked out and costed tax credit system. If they do not, they will do themselves and the country a great disservice and injustice.

Sir Brandon Rhys Williams: My right hon. and hon. Friends can rely on me to welcome the increase in child benefit. I welcome the fact that it has now been raised to its highest ever level in real terms. I was particularly pleased when the then Chancellor of the Exchequer referred to child benefit in his Budget Statement as one of the keystones of the Government's social policy.
Child benefit has the particular advantage of being a universal benefit. There is no humiliation to the beneficiary in drawing child benefit. It is not a divisive form of charity; instead it is built into our tax and social policies. The Government are entirely right to raise child benefit now by an amount greater than is called for simply to match the change in the cost of living. Not only is child benefit satisfactory as a universal benefit, it also has a high take-up, as a result of which the money that is intended to be given to the people who qualify is indeed reaching them.
A point that is often made—I too want to make it—is that a high rate of child benefit helps to stabilise wages and is conducive to the Government's policy of fighting inflation by every possible means. It helps to stabilise wages without hardship, because the people most in need of more resources to meet the cost of living, especially when there are changes in the price of foodstuffs, are dealt with selectively. Child benefit therefore operates selectively although it is a universal benefit. It goes to those most in need of help when there are rises in the cost of household essentials, because it goes to the large families that are the most adversely affected. It does not go to the people who often have more money to spend than they need—such as teenagers in work who are living at home. Instead, it goes to the mothers who have the plates to cover and the shoes to buy.
It also effects a small-scale redistribution within the home itself between husband and wife. We must not forget that mothers have a greater propensity to spend their money for the benefit of the children, whereas if there is more money in the wallet of the wage earner there is a greater tendency for it to be spent in ways that do not necessarily benefit the family as a whole. That may be an old-fashioned point of view, and I know that many things are changing in the relationship between husband and wife; but there are fundamental benefits to society in making a deduction through tax from the wage earner and restoring it to the family in the form of a benefit that is primarily available to the mother.
I accordingly congratulate the Department on increasing child benefit. We should move as rapidly as we can in making all scales of child benefit the same, whether for those in work or for those in need. If we are to overcome the problems of the disincentives to work and save, the major step that we must take is to rectify the anomaly in regard to the scale of child allowances whereby the benefit available to the children of those in work is so much smaller than that available to those who are obliged to apply for unemployment relief or supplementary benefit.
I also particularly welcome the increase to £3,000 in the amount of the disregard in capital resources that is


permissible for people applying for supplementary benefit. The economy is consuming too much and saving too little. It therefore cannot be right to force people to run down their savings and to use their capital for current consumption. Yet that is the way in which the supplementary benefit rules apply. By raising the disregard to £3,000, the Government are taking a small step in the right direction.
It must be contrary to the Government's policy to force people to run down their savings at a time when we are trying to encourage them to save and invest. It also frustrates the whole purpose of thrift. If people discover that there is no point in saving, the incentive to thrift is undermined. We must remember that there are millions of supplementary benefit cases. At one time or another a large proportion of the population will go in and out of the supplementary benefit system. At present there are 7 million people who are dependent on supplementary benefit, and if they discover that thrift is pointless, that lesson will remain with them and the whole ethos of the benefit of self-reliance, saving and prudence will be lost. We must not teach people that saving is futile if they are ever likely to fall on hard times; but that is what we are doing by the way in which we operate the supplementary benefit system. By this change the Government are modifying the ill effects of that system, and it is right that they should be commended for doing so. However, it is only a small step in the right direction.
I have spoken at length this week on the financing of the welfare state, and I do not want to go too deeply into points that I have already made, albeit in a House attended by only one Labour Member and no Member from any of the other opposition parties. I am glad to say that a good number of Conservative Members attended and they made some notable contributions. I hope that Opposition Members will take the trouble to read that debate. It was a pity that they did not come along and make their own contributions.
On 26 July I asked the Secretary of State for Social Services:
what reforms he proposes to introduce in the social security system to increase incentives to work for people in receipt of supplementary benefit".
The Minister for Social Security replied:
None at present, but work incentives are amongst the important issues to be taken into account when any changes in the social security system are being considered".
That was reassuring, but it was not totally reassuring because we do not know what the Department's time scale is.
On the question of timing, the House has got used to the idea that, for administrative reasons, we can afford to introduce only one uprating a year, and that the way in which it is done has to be so slow that it is weeks or months before a decision taken by the Government it can be put into effect. It must be 10 years since I was a member of a small party that was taken to Brussels by one of the computer companies to spend a day looking at ways in which in Belgium the pension system had been put on to a computer, and at the advantages that were available as a result.
I was impressed by the fact that when the Belgian Government decided to make an uprating in the system they were able to do it for the whole of Belgium within days by using a computer. It was not a particularly advanced or difficult model. If the Belgians could do it 10 years ago, surely we should be able to do it by now. But

the Department is still happy to continue—indefinitely, as far as we know—with the old manual methods that date back to before the war. The House should bring pressure to bear on the Department to increase the speed with which it operates when uprating benefits.
I join with those who congratulated the hon. Member for Dunfermline, East (Mr. Brown) on his maiden speech. I am sorry that he is not here now to hear what I have to say. It was a magnificent maiden speech and held the attention of everyone in the House, because he was speaking with an absolute mastery of his subject, with a splendid delivery and with complete conviction. It was a speech that everyone welcomed, even if it stirred feelings of considerable anxiety, because so much of what he said was undeniably true.
If I may venture one criticism of the hon. Gentleman's speech, it is that, although he outlined the problems extraordinarily well, I do not think that we can look to it — I shall certainly read it — to find many practical solutions. Hon. Members on each side of the House must be careful of finding fault with the social services, which it is easy to do, without putting forward their own practical solutions. There are solutions, which I think are practicable and not too expensive.
The question is not whether we can afford to improve the operation of the welfare state but how long we can afford not to do it. Hon. Members on each side of the House who are interested in the workings of the social services should work together to some extent to force the pace at which the Department responds to the obvious needs for reform of the entire system for the redistribution of income. For that reason I was interested to hear what the Liberal speaker, the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), said about the tax credit system. I do not see any reason why pressure for the introduction of the tax credit system — or the basic income guarantee—should be a matter for one party or for another. It is an administrative reform, which would bring enormous benefits to society, and it is not a matter that need be a source of division on party lines.
I repeat that it is urgent that we persuade the Department to introduce uprating machinery of a sort that has been well known and tested for years, and which would enable it to bring in upratings within days.
As a general point, I think that it is right to base the uprating on actual figures rather than on predictions. Mercifully, thanks to the efforts of my right hon. Friends, we have brought down the rate of inflation to the point where it will not be a matter of very great difference whether we use the actual figures or whether we make predictions, because we can tell, broadly speaking, the way in which the movement in household costs will evolve over the months or years ahead.
I think that upratings should be based—I know that this will offend those on the Opposition Benches—on the real performance of the economy and not on the changes in the cost of living. If I were to refer to speeches that I have made over the years on the uprating of benefits, I think I would be able to show that I have been consistent in saying that what society aims to do must be related to its capacity and not only to its hopes. Obviously, we want to protect people from changes in the cost of living, but the cost of living is not within the control of the British Government. If there were to be another upheaval in the price of oil, or major changes in world prices of foodstuffs, we could not undertake always to uprate social benefits to


meet those changes. Equally, supposing that there were, for one reason or another, to be falls in the cost of living, I do not think that anyone in the House would be particularly anxious to be the first to recommend that there should be a fall in the level of benefit.
Applying our minds to the art of the possible, it is reasonable to say that what we redistribute should be related to what we have. I should like to see the gross national product — or perhaps some measure of the actual arisings from the tax system from time to time—used as the measure of what we have to distribute in benefits.

Mr. Frank Field: Before the hon. Gentleman leaves that point, will he develop it a little further? He is suggesting that benefits should not be linked to prices, and probably not to earnings, but to the real performance of the economy. How should the real performance of the economy be measured? What is the likely time-lag between getting those figures and using them for an uprating?

Sir Brandon Rhys Williams: I am grateful to the hon. Gentleman for his helpful intervention. I suggested that we should try to use the GNP or some measure which indicated the actual arisings of tax. I realise that the hon. Gentleman's second point is that the likelihood of delay in producing the figures may cause difficulty, but I do not think that it would necessarily matter, if the Department were in arrears in making changes, if, for instance, it used an index relating to 1982 rather than 1983. It might not be particularly inaccurate, bearing in mind that such trends do not hover very wildly but are fairly consistent over the passage of time. If we choose wisely an index that indicates what society has in the way of disposable resources for redistribution, we are not likely to be proved wrong just because we are three, six or 12 months out of date.
I want to reconstitute the national insurance system on a more permanent basis, so that what goes out and what comes in have some relationship. I should like the entire redistribution of income to be taken out of the Budget and to become a self-balancing institution. It would not be right to place on that institution the responsibility of necessarily meeting changes in the cost of living, which it would not have the resources to do. It should be founded on the reality of the economy, and we should use the arisings of tax to meet the calls for income support on the basis of the money that is arising in society and is available for the purpose.
Over the course of years, such a system might sometimes work to the disadvantage of beneficiaries and sometimes to their advantage, but they would be carried in the economy in such a way that they would belong to the same economic system as the rest of us. I do not think that we should put pensioners — and particularly pensioners from the public service — into a sort of Shangri-la where they are protected from the real movements of prices and from the changes that affect the rest of us, and are increasingly distanced from the rest of the economy. We should continually try to find ways of bringing people on benefit back into the economy —preferably as productive members of it.

Mr. Jeff Rooker: I am grateful for the way in which the hon. Gentleman

responded to the intervention of my hon. Friend the Member for Birkenhead (Mr. Field). Does the hon. Gentleman realise the import of what he is proposing? Currently, earnings are rising by about 8 per cent. Pensioners will get 3·7 per cent., so their incomes will drop relative to the spending power of the average wage earner this year before the hon. Gentleman brings in his scheme to cut benefits further. Does he not think that pensioners and others on benefits are already being forced into the real world by the further erosion of their spending power relative to those in work? Will he take forward the consequences of his suggestion?

Sir Brandon Rhys Williams: The hon. Gentleman is likely to drag me into a speech that will take me rather far away from the upratings that we are discussing. I should be happy to accompany him into this territory because the House needs to work over this ground and to come forward with clear ideas. The incentive to work has to be taken into account, and I wanted to come to that.
I appreciate the point that wages are still rising in some industries and occupations quite fast, but in others they are static. It is a little difficult to make comparisons between what people have through redistribution of income and what they have from their own earnings, to plot the course of these movements and to arrive at a logical comparison. I understand that, but there is a further point that concerns me. The Government are doing their utmost to keep down wage increases, and in certain occupations, particularly low paid ones, they are having considerable success. This is helping to diminish still more the incentive to work of people who are on benefit. If the Government raise benefits in line with the changing cost of living when the wages of people who are only just above the level of benefit are static or relatively static, they will add to the number of people who are beginning to ask themselves, "What is the point of working?" This is unhealthy and it is a problem that must be solved. It is no good shovelling it under the carpet from one year to the next hoping that it will go away. That is why I quoted the disappointing reply from my hon. Friend the Minister to my question about introducing social security system changes that would increase the incentive to work.
I have one suggestion to make. While we are waiting for a tax credit system or a basic income guarantee or something of that kind that would solve this problem, we should make a move in that direction. We could afford to increase the disregards in terms of permitted earnings or the hours of work that are allowed for those who are in receipt of unemployment benefit—or of supplementary benefits where they have exhausted their entitlement under the national insurance system — without loss of entitlement to help. Many people are tempted to take part-time work and perhaps even do so while drawing benefit. That is not necessarily a crime—rather the reverse. I admire people who better themselves when they are in financial difficulties and we shall all stand to gain if they do. It must be in the interests of the economy if people work who otherwise would be idle. I resent the system that forces millions into complete idleness, because that must be contrary to the basic health of the economy as a whole.
Part-time work may not be as good as a full-time job, but it is better than nothing. It is better for the self-respect of the person who goes to work and gains some independence. It keeps people in practice so that they do not become unused to the habits of work; and it gives them


opportunities to acquire new skills through part-time work. People may discover that they have an aptitude about which they do not know and when they come to apply for jobs in the knowledge that they have already done some time in a new occupation and can rise to the challenge, that gives them confidence that they otherwise would not have.
There are many reasons why it would be highly desirable to allow people who have fallen out of full-time work to better themselves in any way and without the loss of benefit, at any rate for a long time. I hope that my right hon. and hon. Friends will consider that suggestion as a serious one.

Mr. Gareth Wardell: rose—

Sir Brandon Rhys Williams: If I allow hon. Members to turn this into a dialogue I shall take up too much of the time of the House. Unless the hon. Gentleman has an extremely pressing point that he wishes to make, it would be better if he made it in the form of a speech of his own, because I should be finishing my speech.
There is nothing about the Government's commitment to end the earnings rule, as far as I am able to discern, in any of this mass of papers that we are considering, but it is a commitment that the Government often repeat. It is an application of the same principle that I was recommending in regard to people of working age. How can there be a real cost to the economy in abolishing the earnings rule if the result is that people work and create wealth instead of doing nothing? We must look at the logic of this and not at the figures. The Government have allowed themselves to be persuaded that doing away with the earnings rule would be too costly at this time, but how can it be costly to encourage people to work instead of consuming without creating wealth in exchange?
Let me summarise the situation that we are analysing in this debate. The welfare state is an unhappy, transitional system on the verge of administrative breakdown. It operates against the Government's policies in ways that affect millions of people. It operates against the cohesion of society and against the independence and self-respect of millions of individual citizens. I hope that today's debate will help to create a sense of urgency among my right hon. and hon. Friends and in the Department of Health and Social Security. We look to the Secretary of State and to the Ministers to initiate major changes, and to act quickly.

Mr. Peter Hardy: The House will no doubt accept the view that the hon. Member for Kensington (Sir B. Rhys Williams) is much less malevolent than Ministers in his political approach, but if we were to pursue his suggestion and change the character of the social security calculations, the effect would probably be to remove the safety net, and not even the most malevolent of Ministers would suggest that. However, I endorse the hon. Gentleman's view that thrift should not be discouraged, and join him in the call for the rundown of individual assets to be stopped. The £3,000 mentioned in the documents is not enough. The hon. Member for Kensington suggested that he does not believe that the Government wish to see individuals run down their assets, but if they did, they would be consistent, as they are determined to run down the nation's assets. I share the hon. Gentleman's view in that I do not believe that sacrifice should be added to hardship and misfortune.
The Minister sought to present an ebullient image by appearing to create the impression that the Government were being sensible and flexible. He tried to do so by concentrating largely upon one part of the Government's responsibilities. He ignored the hostoric diminution of purchasing power and was willing, as the Government have always been willing, to maintain the situation in which hardship is imposed on many people. That hardship tends to be severe, and concentrated within industrial areas.
I congratulate my hon. Friend the Member for Dunfermline, East (Mr. Brown) on his maiden speech. He showed the effect of the Government's social policy in areas of high unemployment such as that which I represent, where there are 135 unemployed people for every job. Since the Government have come into office we have seen the number of social security beneficiaries treble in less than five years. That means that in areas such as mine the purchasing power of the community is depressed because so many people within the community are on supplementary benefit or other social security benefits. This reduces our capacity to promote recovery within our district because the unattractiveness of an area where purchasing power is below average does not assist economic recovery. The Government suggest that they are flexible and sensible, but their record does not justify that claim.
The hon. Member for Kensington berated my hon. Friend the Member for Dunfermline, East and claimed that in his distinguished maiden speech he admirably presented the problems, but failed to suggest solutions. But the solution was underlying the whole of my hon. Friend's speech, because he argued against the maintenance of the monetarist policies that are behind the difficulties that Ministers are trying to patch up.
I do not believe that the Government deserve to be described as flexible and sensible. I shall illustrate why by outlining the circumstances of a relevant case that is covered by the order.
I tabled a question for oral answer yesterday. As so often nowadays, with a smaller number of Labour Members asking more questions of an incompetent Administration, I was unable to get an oral answer. However, I received a written answer to my question in which I asked the Minister to improve the arrangements for paying the guardian's allowance. The Minister who replied told me that he could not improve the arrangements, but he would be happy to correspond with me about the details of the case. As the case has been the subject of correspondence with the Department in recent months, it hardly seems worth going round the course again.
However, the case illustrates the need for the flexibility and common sense that the Government claim to possess. A couple in my constituency have two small children of their own and do not receive a high income. As is common in south Yorkshire, they are fearful of redundancy. They have taken in the wife's brother, who is 13 years old.
Like me, the Minister worked in education for a long time and, even in most Wackfordian guise, he will agree that it is not cheap or easy to care for a 13-year-old boy. Despite economic pressures and their anxieties, the couple have taken the boy in, but have been deprived of the guardian's allowance because the lad is the wife's brother.


They took him in because his mother died of cancer last year. His father is prematurely senile, disabled and incapable of looking after him.
The couple honourably took the brother in and are bringing him up as their own son. They are doing a first-class job, but they are denied the guardian's allowance. If redundancy strikes or their economic condition continues to decline, as it may, since we face the prospect of at least another four years of Conservative Government, their sacrifice in caring for the boy will be compounded.
If that couple's circumstances had not allowed them to take the boy in, my local authority would have had to take him into care. The Minister knows that the cost of taking a boy into care wou0ld be more than £150 a week. The Government might not mind that. They have made Britain accustomed to the experience of the Government loading burdens on to local shoulders. The Government might feel that Rotherham borough council, an effective local authority, should pay the bill.
I suggest that there is no flexibility or common sense in a Government who deny the excessively modest guardian's allowance to a family when the alternative would be a much larger bill—perhaps 20 times—to take a boy into care.
I thought that there might be some residual concern for flexibility and common sense. I have not known of a similar case in my 13 years as an hon. Member and it seemed to cry out for flexibility. I thought that it would be sensible to give that decent couple a little more money to help them cope with a boy who has seen one parent become enfeebled and lost another in distressing circumstances.
The family is worried about the future. The case that I have advanced in correspondence, that I should have liked to press at Question Time yesterday, and that I am fortunate to be able to present today ought to suggest to the Government that a more sensible approach to the guardian's allowance is essential. I urge the Minister to look at the matter again and ensure that justice is done.
I am sure that there will be other cases similar to that in the Wickersley-Bramley area of my constituency. As the boy is only 13, the Minister will understand why I do not wish to name the family and to inflict on them the attentions of the British press, which does not always command our esteem. However, the names and the family's address will be in the Minister's records. I trust that some flexibility and common sense will be shown on the guardian's allowance and that they will be shown soon to the family in my constituency.

Mr. Roy Galley: I have noted with considerable surprise the sterility of the contributions of Opposition Members. There has been much talk about unemployment, which is not the subject of the debate, and about supposed cuts in unemployment benefit, which are not before the House and are not likely to be for a considerable time.

Mr. Rooker: They are coming, are they?

Mr. Galley: We have had some minor quibbles about two sets of regulations. Regulations on board and lodging are frequently abused.

Mr. John: Give us the evidence.

Mr. Galley: Those regulations are being tightened up, and the Opposition have quibbled about it.

Mr. John: I know that the hon. Member is new to the House and believes that assertions made on platforms outside pass for evidence, but he must justify his statements. Where is the evidence that any organisation has abused the system? The hon. Gentleman will have heard his hon. Friend the Member for Saffron Walden (Mr. Haselhurst) put that point to the Minister, who replied that there was no evidence of any organisation abusing the system. What evidence does the hon. Gentleman have?

Mr. Galley: There is a certain amount of evidence which I do not think that it would be proper to discuss on the Floor of the House.

Dr. Boyson: I am informed, and I am sure that my hon. Friend the Member for Halifax (Mr. Galley), who is knowledgeable about these matters, has also been informed, that a number of institutions have had board and lodging costs of £200 a week.

Mr. John: Name them.

Dr. Boyson: I will not name them in the House at present.

Mr. John: Name them.

Dr. Boyson: I cannot, because I do not have the names with me. I am prepared to contact the hon. Gentleman. We are informed that they are being paid £200 a week for board and lodging. Any Labour Member who does not believe that £200 a week is excessive for board and lodging is more in aerial space than is usual in the Labour party.

Mr. Galley: It would not be appropriate to mention names in this Chamber, but it is true that the levels have been artificially jacked up in a number of instances.
This evening we have discussed a regulation that will tighten up the rules for those who become voluntarily unemployed, the people who are unemployed without just cause. I find it inconceivable that anyone should leave a job voluntarily, except in the most extreme circumstances. People outside this Chamber would not accept any argument that the social security system should be exceedingly lenient with such a person. Deductions to discourage such activity are essential, and the regulations that are before us do that. That, apparently, is the only major issue on which the Labour party is prepared to divide the House.
Labour Members then grudgingly went on to say that they would not oppose the uprating orders. To my mind, that is mean-minded. I should have thought that they would welcome what was being done. Social security benefits have kept pace with inflation. Pensions are going up commensurate with inflation. Taking the last five years, they are 4 per cent. ahead. Supplementary benefit will be 1½ per cent. ahead. This year, in an act of considerable generosity, in my view, supplementary benefit is going up by 4·3 per cent. That is considerably more than the basic retail price index level of inflation. There is a record increase in child benefit, at 11 per cent.

Mr. Andrew F. Bennett: rose—

Mr. Galley: No, I must get on, because I have already been interrupted.
We are restoring the 5 per cent. abatement of unemployment benefit. These are all vital measures, and


one would have thought that the Government's generosity would be welcomed by the Opposition, but no. What we have is mean-mindedness and quibbles.
Poverty in this country, relatively, was as great under the Labour Government as it is now. Of course there are problems of relative deprivation. We would all like to do more. Wherever there are rules, there are bound to be individual cases where there is unfairness. One cannot devise a social security system that is right for every individual. I personally would like to see more given to widows. There are certain groups of disabled people who, ideally, deserve better treatment. I should have liked the Christmas bonus to be increased this year. I should have liked the £3,000 capital limit, which is being improved in these instruments, to be considerably reformed. It brings problems. It means that thrift is discouraged among many people, and I hope that in due course the Minister will introduce a tapering effect to overcome some of the injustices in the system.
There are many improvements in society that we should all like, but we have to take them step by step, and each has to be paid for. How are we to do that? We can pay for them by tightening the screws on fraud. My right hon. Friend has that in hand. We can improve the administration and thereby make more resources available for social benefits. My right hon. Friend has that in hand. We can tighten up the rules so that the money goes to the people who are really in need. That matter is in hand, and we are making progress in that respect tonight. We can simplify the system, and I sincerely hope that during this Parliament we shall make considerable progress in that respect.
Reference was made earlier in the debate to the possibility of a tax credit scheme or a negative income tax scheme, or something similar. There seems to be some unity across the Floor of the House about the desirability of such a scheme. There were a number of favourable comments about the idea of a tax credit scheme, but in simplifying the system we must keep an eye on the overall cost to the nation and the inequalities which can easily be built into that system. The difficulty in producing a simple system is that many anomalies arise and accretions result. It can become a complex monster with enormous difficulties. So, although I welcome any steps to simplify the system, we must he aware of those problems.
There have been a number of suggestions from the Opposition Benches to the effect that they want vastly to increase social security benefits. They would like to increase them to the level of earnings rather than inflation. That would add billions to the £35 billion that we are already paying in social security. That is almost a third of total public expenditure and that in itself is but a mere drop in the ocean of the programme that the Labour party put to the electorate at the last election and which was rejected because it had no cohesion or credibility.

Dr. Boyson: Hear, hear.

Mr. Galley: I am delighted that my hon. Friend agrees with me because I have a great respect for his intellect and headmasterly qualities.
What would be the consequence of following all the suggestions that have been made by Labour Members in the debate? Are we to go towards massive rises in taxation and borrowing, as has been suggested? Are we to return to the days of 20 per cent. inflation and 20 per cent.
interest rates? If so, how will inflation of 20 per cent. and more help the poor, the needy and the pensioner? It is the inflation-ridden society that makes the poor particularly poor. Poverty increases when inflation is rampant. Labour Members may well laugh and giggle, but they have no significant intellectual argument to advance.

Mr. John: Will the intellectual give way? How, taking account of all price increases, does he explain that the Labour Government of 1974–79 increased retirement pensions by 20 per cent. in real terms while in the next four and a half years the Conservative Government did so by only 0·8 per cent?

Mr. Galley: The disasters of the last Labour Government were based on such fantasies — [HON. MEMBERS: "Answer the question."]. I am answering it. That produced inflation of 26 per cent. at one stage. It was the precursor and the bedrock of today's unemployment. That is the sort of policy that the Labour party is still putting to the country, having learnt nothing, which will produce unemployment and inflation yet again.
Over the past 30 years high unemployment has followed high inflation. High inflation is the precursor of unemployment in every situation.

Mr. John: How does the hon. Gentleman explain the fact that prices fell in the 1930s as unemployment rose?

Mr. Galley: My knowledge of the history of the 1930s is a little limited. During the period of office of the Labour Government inflation rose by about 100 per cent. and unemployment also doubled.
The Labour party is seeking to mislead people by suggesting that there is a money tree at the bottom of the garden—a magic wand by which benefits can easily be increased across the board. That is complete hypocrisy and the Labour party is misleading the nation. Perhaps it comes down to the normal problem of the Liberal party.

Dr. Boyson: Does my hon. Friend agree that the Labour party was not just misleading the nation at the last election but the nation said that it would not be misled any longer?

Mr. Galley: My hon. Friend is right.
Perhaps those policies are still being put forward in the House because the Labour party is now in the position that the Liberal party has been in for many years—being able to make promises when it knows it will never have to face up to the responsibility of carrying them out.
We must pay tribute to the achievements in social security benefits in recent years. Improvements must come step by step. We cannot make radical changes overnight. The social reform record of past Conservative Governments shows our achievements. We have kept benefits, especially pensions, ahead of inflation. We are now paying out considerably more for pensions because there are a greater number of retired people. We have introduced a record rise in child benefit. There is more money available for—

Dr. Boyson: Does my hon. Friend agree that people are living longer under a Conservative Government?

Mr. Galley: But of course.

Mr. John: They cannot afford to die.

Mr. Galley: More money is available than ever before for the heating fuel addition. The rise in unemployment


benefit this year is more than 8 per cent. One-parent families will be better off than ever before. They are now eligible for the long-term rate of supplementary benefit after one year rather than two years. They can also earn more before the tapering effect comes into operation. There have been substantial increases in the take-up of attendance and mobility allowances. The level of mobility allowance has virtually doubled during the past five years, and it has been taken out of tax. We have extended the invalid care allowance and are removing the invalidity trap.
That series of achievements has not been given sufficient prominence. Opposition Members continually pooh-pooh our achievements. We are justly proud of our record.
I wish to comment on the actual and forecast methods of paying pensions and other benefits. It is more sensible and fair to pay benefits on the basis of what has happened than on the basis of what might happen. History shows that paying on the basis of what might happen produces anomalies. The subsequent readjustment to correct the anomalies is a painful process.
Pensioners should be treated in the same way as wage earners. Pay negotiations are based on historical and actual factors. The key factors are the level of inflation at the time of settlement and what a company can afford. Social benefits must be determined on the same basis—

Mr. John: rose—

Mr. Galley: I am not prepared to give way because my time is short.

Mr. John: Will the hon. Gentleman give way on that point?

Mr. Galley: No.

Mr. John: rose—

Mr. Deputy Speaker (Mr. Harold Walker): Order. The hon. Member for Halifax (Mr. Galley) clearly is not giving way.

Mr. Galley: Those in receipt of social security and pensions are better protected than many employed people. Some wage earners have accepted rises that are less than the current rate of inflation.
The Conservative Government have considerable achievements on their record. That is what we are debating tonight—not the petty, mealy-mouthed points raised by Opposition Members. They should remember that there has been a substantial rise in unemployment benefit.

Mr. David Winnick: I am pleased that the hon. Member for Halifax (Mr. Galley) was not making his maiden speech; because I do not have to go through the fiction of saying how pleased we were by his contribution. Indeed, I am not sure whether he had been called upon by the Government Whips, as a last resort, to make a contribution. I must warn him—I hope that he bears my words in mind when he next comes to contribute to a debate of this nature—that if he is not careful he will be given the lain Sproat award, and not many of us would wish to receive that.
There is great concern, particularly among my hon. Friends, about the way in which pension increases and

other benefits are to be calculated for uprating purposes. As a result of the change which the Government have introduced, a retired married couple will lose 1.20 a week and single pensioners 75p a week, as my hon. Friend the Member for Pontypridd (Mr. John) pointed out. These are considerable sums for those living on limited incomes, and when one considers how pensions are no longer increased in line with earnings, no wonder retired people feel that they have had a rough deal under this Government.
Despite what the hon. Member for Halifax—I notice that he has already left the Chamber—said about the way in which pensioners were treated under the last Labour Government, there is no doubt that they received a much better deal, despite the difficulties which Labour then faced.
The Government argue that any loss—for example, as shown in the figures which I quoted—will not be all that great for pensioners because it will be made up next year. But some of them will not be around next year. Indeed, why should pensioners have to wait a year for any loss to be made good, bearing in mind the difficulties they have in making ends meet? We must remember, too, that the change in calculating benefits affects many other people.
People in some groups in society are obliged to spend much more on the essentials of life. I have a paper prepared by the Library showing average weekly household expenditure on certain items in the year ending June 1982. Whereas households in general spent 15·9 per cent. on housing, retired married couples spent 20 per cent. and single pensioners spent 29·5 per cent. General households spent 21·8 per cent. on food, but married pensioners spent 32 per cent. and single pensioners 27·2 per cent.
The point I particularly wish to stress tonight is the amount spent, especially by pensioners, on fuel, light and power. Whereas general households spend 6·1 per cent. per week on such items, retired married couples spend 11·1 per cent. and single pensioners 13·7 per cent. Clearly, therefore, the retail price index does not in many ways reflect the difficulties faced by those on low incomes, especially pensioners, in trying to make ends meet in terms of the basic essentials of life. I have often pointed out that the cost of fuel places a great burden on those on low incomes, particularly pensioners, but also those who do not quite qualify for supplementary benefit.
The Government embarked on a policy of ensuring that gas and electricity prices—certainly gas prices— are raised in excess of the rate of inflation. This causes tremendous difficulties for those on limited incomes. Pensioners who qualify not for supplementary benefit but for rent rebate are clearly on limited incomes, but they receive no assistance with their fuel bills. It is understandable that great hardship is incurred. Those on average incomes do not find it all that easy, especially during the winter months, to pay their fuel bills. I ask the House to imagine the plight of those who receive no assistance and who live on the incomes to which I have referred. The Government have a duty to extend the fuel scheme to ensure that it provides the necessary assistance.
The Minister has announced that in November 5 per cent. will be restored to unemployment benefit. We are pleased that this is so, but the Government should not have failed to restore it when unemployment benefit was subject to tax. In 1980, 5 per cent. was removed from the increase in unemployment benefit in lieu of taxation, but when the


benefit was subject to taxation a year later the 5 per cent. was not restored. If there had not been a commotion in the House and if the issue had not been raised repeatedly, the Government would not have restored the 5 per cent. The Government were certainly not so keen to make the restoration and their past failure to do so has been a grave injustice to the unemployed. Indeed, it has been a form of double taxation and the Government can take no glory for the way in which they have acted.
What will happen to unemployment benefit next year? The Prime Minister has already warned that there is no promise that it will be increased in line with inflation, and that may be so for short-term supplementary benefit as well. If the Cabinet takes the view, as a result of the review of public expenditure, that unemployment benefit should not be increased in line with inflation in 1984, many Conservative Back Benchers should think carefully whether they can support the Government. There can be no justification for penalising the jobless in the way in which, apparently, the Cabinet are determined to do.
The Minister has told us that the disregard will be increased to £3,000. Like many other hon. Members, I am pleased that that is so. However, the disregard remains too low. If a person has saved during his working life to accumulate a nest egg for his retirement, and if we take into account the fact that the £3,000 includes, in many instances, redundancy payments, the effect of the disregard is to penalise those who have saved. If a man is made redundant when he is in his fifties and he has to spend in excess of the disregard of £3,000, he will have less money when he retires. The effect is all the stronger when people in their fifties are made redundant and they find that they are unable to get any other employment.
The system that was operated when my party was in government was much fairer than the one that has been adopted by this Administration. At one time under this Government the disregard was £2,000, and it has been raised rather slowly to £3,000. The disregard will continue to penalise a good number of people whose only crime is that they happen to save during their working lives. I should like to see a higher figure than £3,000.
Millions of households rely on supplementary benefit because of mass unemployment caused by Government policies. It is an indictment of the Government that so many people are forced to claim and live on supplementary benefit. If we listened only to the way in which some Conservative Members spoke tonight, we would not appreciate unless we knew the truth — the acute hardship and the poverty faced by so many of our constituents who find it a daily battle to make ends meet. During the immediate post-war years we were proud that in the large majority of cases children were no longer brought up in poverty. Today, the situation is different. In my constituency, there are households where the breadwinner is unemployed and can no longer fulfil his role. That state of affairs obtains throughout the country.
The Minister and his colleagues should be telling us that the Government will change their policies so that people can stand on their own two feet. The Prime Minister and her supporters always talk about their wish that this be so, and it can be achieved, by pursuing policies that enable people to earn a living. That is the most effective way to undermine the poverty and hardship to which we have been referring tonight.
The welfare state has never been under greater threat. The Cabinet, in carrying out its review of public spending,

intends to make cuts that will further undermine the welfare state, which came into existence after the second world war. If the Cabinet succeeds then in getting its supporters into the Division Lobby to support it there will be a further lowering of living standards for many of those who are forced to live on supplementary benefit. Until there is a change in economic policy and economic sanity is restored, unfortunately millions of people will continue to live in poverty and near-poverty and many will be denied the opportunity to earn their own living. We shall have the sort of circumstances about which my hon. Friend the Member for Dunfermline, East (Mr. Brown) spoke in his distinguished maiden speech. What he said about his constituency is true of many others.

Mr. Andrew Rowe: I am sorry to have to begin by apologising for the fact that I shall not be here throughout the debate. My excuse is that I have an engagement, which means that I may not be able to stay for the Minister's reply. I am consoled to some extent by the knowledge that many of the faces opposite are different from those that were here when I attended the early part of the debate, when I heard a distinguished maiden speech by the hon. Member for Dunfermline, East (Mr. Brown).
Few discussions are more important than one about those who are least fortunate in our society. I am one of those hon. Members who believes strongly that this is a matter of grave priority to which we should all pay attention.
In my only previous speech to the House, I argued that the entire social security system needs radical change. I am to some extent happy in the knowledge that only six hon. Members were present when I made that speech because I may therefore say, although somewhat differently, some of the things I said before.
Few things show more clearly how times and remedies alter than the fact that one of the greatest obstacles to the creation of a modern social security system is the spirit of Lord Beveridge—alive and well in the Elephant and Castle. Beveridge believed in a national insurance principle. We do not have one any more. Beveridge believed in the recipricocity of rights and obligations. For a variety of reasons many people, especially among the younger generation, have no reason to see the link between those two concepts. I am not blaming anyone. Because of the way society has evolved there are many young people leaving school who believe genuinely that the world owes them a living. All my generation has a responsibility to explain to them some of the obligations they have to shoulder as members of society.
Beveridge believed also that the man would always be the breadwinner and that a woman should have to show a higher proof of need. That part of the Beveridge concept lingers on, to the considerable detriment of many people with profound disabilities or deteriorating circumstances. We need to study that concept closely. I am delighted to see that the regulations take a further step towards eliminating inequalities between the sexes. However, I do not believe that the Government have genuinely accepted that principle.
Beveridge also believed in the "safety net" concept. There are 7 million people in receipt of supplementary benefit. Far from being a safety net, it resembles more closely the net with which a group of men went out and caught a miraculous draft of fishes. It is an indictment of


the way in which, over the years, successive Governments have allowed the social security system to become outdated.
A major consequence of the destruction, in practice, of the insurance principle—

Mr. Ralph Howell: My hon. Friend has told us of several items that Beveridge included in his report. He has neglected to say that Beveridge also said that there should be a work test and that, after receiving unemployment benefit as a right for a certain period, work should be offered in lieu of benefit. Does my hon. Friend also realise that Beveridge said that young people should never leave school and immediately join the dole queue? Those two important facts have been left out.

Mr. Rowe: I am grateful to my hon. Friend. He has reinforced my contention that Beveridge has been superseded and is out of date.
I should like to see a system whereby people leaving school are offered a work opportunity of a kind that society respects. One of the great problems of our society is that children are compelled to stay in school for 15,000 hours. School is the only compulsory attendance, apart from prison, foisted upon our citizens. As many as 40 per cent. of the children now leaving school have nothing to offer society because of the way the education system is designed. That is another indictment of our attitudes, which are becoming out of date.
A major consequence of the destruction in practice of the insurance principle, with its attenuated survival in theory, has been the sharp differentiation between the self-employed and the employed. Men and women have the courage to accept the challenge rightly put before them by our Government to go into business for themselves, frequently using their redundancy money to do so. If after a period of self-employment they find that their venture fails, they are at a considerable disadvantage compared with those who have gone straight from employment into unemployment. That is unjust and improper.
We see the same iniquitous unfairness, which the hon. Member for Walsall, North (Mr. Winnick) mentioned, in that those who have scrimped and saved to set aside a small portion of their wage each week to build up some security for themselves and their family are at a severe disadvantage when they become unemployed. That is a dreadful indictment of the description "unearned income", which is a remarkable rhetorical trick to devalue the efforts of those who are prepared to save rather than spend every penny that they have. That too needs change.
Therefore, I am pleased to see the steps that have been taken in the regulations to improve the level of benefit and to honour the pledge that the Government made that the people at the poorest end of the spectrum shall not suffer because of the level of prices. However, the time has come to look closely at the real costs of administering the ragged boundary between work and non-work, between self-employment and employment, between the male and the female breadwinner, and between those who have some savings and those who do not. We should find a better way. Whether that way lies with the policies of my hon. Friend the Member for Kensington (Sir B. Rhys Williams), I am not sure, but I am certain of one thing. My hon. Friend has taken enormous pains to find out where the present social security system fails and to

suggest constructive alternatives. I very much hope that many people in the Conservative party will join him in the endeavour to find a more equitable system.

Mr. Gareth Wardell: Unfortunately, the hon. Member for Kensington (Sir B. Rhys Williams) is not in the Chamber. I wished to intervene to ask him whether the drift of his argument was towards a suggestion to the Minister that the special claims control unit should be abolished in the light of the fact that benefits should not be reduced for part-time work.
I wish to follow the argument of the hon. Member for Mid-Kent (Mr. Rowe) because William Beveridge's great 1944 pamphlet was "Full employment in a free society". It is interesting to note that in paragraph 3·4 of its annual report for 1982 the social security advisory committee stated that at that time the Government accepted the principle that the long-term supplementary benefit rate should be made available to the long-term unemployed. The only obstacle was cost.
In a recent parliamentary reply to me, the Secretary of State for Social Services added a new element. He is no longer happy to accept that principle because he is worried that the incentive effect for those in work may not operate if the long-term rate applied to those receiving long-term supplementary benefit. I am very worried about that. The reason is that under this Government long-term unemployment has increased at a rate unknown in British economic history. "Chronic unemployment" has become a new term in our economic textbooks. In my county of west Glamorgan, two in every five people out of work have been on the dole for more than a year. Despite the new uprating regulation, the long-term rate of supplementary benefit is denied to the unemployed.
In referring to the uprating, I shall confine my remarks to the board and lodging allowance, about which I shall make three points. First, I am pleased to note that the Government accept that the setting of limits for board and lodging has been unsatisfactory. In Newcastle the boarding allowance was recently increased by 80 per cent. The DHSS paid £37 per week for board and lodging. That Department carried out a survey using its own guidelines and criteria which showed that the figure should be £63 per week. The figure was increased in May this year to £60 per week.
Secondly, it is not sufficient to consider cost by itself. It is vital to check that the accommodation is satisfactory. Price is not the only criterion to be considered. If the accommodation is not checked landlords may abuse their position. They may exploit those receiving this benefit by allowing overcrowded conditions as well as fire and health hazards. The Minister must consider those matters in his reply.
Thirdly, will the Minister assure the House that under the three-tier scheme organisations such as Women's Aid and hostels for the homeless, especially those run by volunteers, will continue to play a vital role in the provision of board and lodging?
I welcome regulation 4, which states:
Supplementary benefit officers should consult housing aid associations and other bodies regularly involved in housing the homeless in setting the limits.
On 9 May I was informed by Mr. Kearns, the Wales area supplementary benefit officer, that the local level is reviewed once a year, usually when uprating of benefits


takes place. It is essential that the limit should be set after an adequate assessment has been made, especially when tourists come into the area at different times of the year.
Therefore, I hope that the Minister will examine the need for a winter and a summer rate. It is not easy to find board and lodging for £30 or £35 a week in Caernarfon or Colwyn Bay respectively at this time of year. That problem should be carefully examined. Perhaps the Minister will consider an MSC scheme whereby geography graduates examine in detail each DHSS area office and make a comprehensive survey so that the figures and the information that supplementary benefits officers make are accurate, that there is decent accommodation and that it is checked. They could also ensure that the system works properly, fairly and adequately.

Mr. Jeff Rooker: I hope that the final point of my hon. Friend the Member for Gower (Mr. Wardell) will be taken up by the Government as a practical, positive and cost-effective suggestion which would improve the efficiency of the Department.
This has been a typical social security debate. There has been a virtually empty Chamber, a completely empty Press Gallery, and no sign of the SDP and all that goes with that. It is no different from what has happened in the past four years. The highlight of the debate—I suspect that it will remain so when we divide at 10 o'clock — was the maiden speech of my hon. Friend the Member for Dunfermline, East (Mr. Brown). It was a privilege for my right hon. and hon. Friends and me and, I suspect, Conservative Members to listen to that speech. In some respects, it is a pity that the hon. Member for Halifax (Mr. Galley) was not making his maiden speech as we should not then have been able to interrupt him as we did. He did not do the cause of the citizens of Halifax much good with the quality of his speech. He did not come to participate in our debate as was evidenced by his almost immediate departure from the Chamber after making his speech.
We are discussing a mixture of 14 regulations and orders. They affect virtually half the country's population. We are dealing with 9 million pensioners, 3 million unemployed, 12 million children — 24 million of our citizens who form quite distinct groups. To that figure we must add the sick and disabled. We are discussing the total income support for the vast majority of nearly half the population.
The House does not take the subject seriously. Although I enjoy his speeches, I must tell the Minister that he did not take the subject seriously. He should have done so, in view of the seriousness of it.
The debate has centred on the uprating system and arguments about voluntary unemployment. The Opposition bitterly resent the way in which the Government have changed the system for uprating pensions and other benefits during a year in which recipients will lose. My hon. Friend the Member for Pontypridd (Mr. John) said that people did not engage in a vast academic discussion of the system if, when the system is changed, action is taken to ensure that people do not lose. No such action was taken when the Government put through the Social Security and Housing Benefits Act 1983. Under that Act, pensioners will lose money from November — single people 75p a week and married

couples £1·20 a week. That does not include all of the other cuts that pensioners have suffered since the Government came to office in 1979.
The evidence for that is clear. From November this year, a married couple will receive the basic state retirement pension of £54·50. However, it should be £58, which was the figure published by the Labour party during the election campaign. It arrived at the figure by restoring what pensioners lost because of the break with earnings and allowing for 6 per cent. inflation in November. Anyone who says that the Government continue to increase benefits but do not cut them, does not take into account what has happened during the past four years.
However much the Government wish to argue the point, at no time did the previous Labour Government introduce a Bill or order to claw back benefits. We know that the forecasts were wrong. People talk about that as though it were bad, but the forecasts were more often wrong in the right direction than in the wrong direction, so there was a net gain in real terms. At no time did the Labour Government bring forward a Bill, such as the Government have done twice, to cut the benefits that would be paid in the following November. They cut a penny in the pound in 1981 and 2½p in the pound this year.
I remind the Government about a few matters not included in the uprating orders. I make my following remarks with humility because of the dates that I shall mention, so the Minister of State can remain seated and calm. The blindness addition to supplementary benefit of £1·25 has not been changed since 1962. Why was it not uprated this year? The extra pension for the over-80s has been 25p since 1971. Why has that not been changed? Why has not the earnings disregard for the single parent changed? That example is more pertinent than the previous two. The earnings disregard was changed in November 1980, so why are the Government freezing the disregard for the single parent at £4 plus half of the next £16? Has it not been changed because the Government have given up hope that the single parent could take account of the disregard because they know that he will not get a job? It is an acceptance of long-term mass unemployment. I hope that that will be considered in the 1984 uprating.

Mr. Andrew F. Bennett: What about the death grant?

Mr. Rooker: I have not mentioned a series of benefits. We know from the Minister of State's intervention that people are scared to die under this Government because the cost of dying is so great.
One point of contention is the last order, upon which we shall seek to divide the House, which affects so-called voluntary unemploymet. The matter has been discussed at length today and I shall not repeat the arguments of hon. Members on both sides of the House. However, the south Birmingham family service unit sent a note to Members of Parliament, which stated:
On the matter of voluntary unemployment SB disqualification—how's this for injustice? A dairy that operates locally has decided to make several roundsmen redundant and pay them one statutory amount of redundancy. In the case of our client £800 (for six years) and then offers to sell their jobs back at £2,000—this is called a franchise. He can also buy the milk float and thereby receive the right to sell the goods supplied by that dairy. In the case of our client he raised the loan to buy his job back but the firm would not sell him his round and sold the franchise to another man who had only 12 months' association with the firm. As a token attempt to assuage their guilt they offered him employment on another round to the south of Redditch, at a depot approximately 13 miles from his home.


There is no public transport at 5.30 am and our client does not have a car that is 100 per cent. reliable. He can either cycle, bus or get a lift to his present depot, which is three miles from his home in the Selly Oak constituency. He has a clean record (ie. no disciplinary proceedings against him). I do not think that anyone would reasonably say that by not taking the job in Redditch our client was making himself voluntarily unemployed but the unemployment benefit office saw fit to disallow unemployment benefit and, of course, the DHSS fall into line and disqualify SB".
That is allegedly an example of someone who has put himself out of work and who will now have to live below the safety net. That rock-solid example, which I have read verbatim, was sent to us by the family service unit in Birmingham. I need not dwell further on why we intend to vote against that regulation.
The Secretary of State, who graced us earlier with his presence, was complimented on his courage in trying to fight the cuts, but what are the Government trying to cook up? The House and the country are entitled to know, not by press leak but by statements made here.
On 25 July The Guardian ran a headline:
Fowler declines to lead revolt on cuts.
The story said that the Secretary of State
is expected to resist appeals to heroism by his Cabinet colleagues.
The front page of The Times on the same day carried the headline:
Dole benefits may be kept below cost of living",
and a paragraph in that story stated:
Specific reports that Mr. Fowler is contemplating resignation if the pressure grows too great were firmly denied yesterday. On the contrary, it was stated that he means to fight.
Who for—the social security beneficiaries or his own job? A headline in the Daily Mirror, again on 25 July, was:
Ministers 'may quit' in cuts fight.
Obviously, there is much talk between Ministers and journalists. The Daily Mirror story says that the Minister for Health and the Secretary of State
are said to be ready to fight to the point of resignation"—
not to resignation, but to the point of resignation. We know that the Prime Minister has more or less laid down the law on the uprating of benefits, and in a moment I shall remind the House of what she and her ministerial colleagues are on record as saying.
The Minister for Social Security referred to the safety net of supplementary benefit and, almost in passing, to the earnings-related state pension scheme, known in some quarters as the O'Malley Act. That Act of Parliament and the system of earnings-related state benefits have been, and are continuing to be, wrecked by the Government. Today's 30, 40 and 50-year-olds who think that they are paying an earnings-related contribution that will get them an additional earnings-related pension on top of their state pension which will be good enough to keep them off the means test, are under a sad delusion.
The linking of the state retirement pension to prices is a cut, because this year earnings are likely to rise by about 8 per cent. The upper and lower earnings limits on which the national insurance system is based are directly tied to the state retirement pension. Therefore, the money that flows into the national insurance fund flows in between those earnings limits which, now that they are linked to the pension, are no longer moving in line with earnings. As a result, not enough money will go into the national insurance fund, and people out of work will not have the

chance to contribute more because a smaller portion of their incomes is liable to national insurance. Consequently, they are prevented from paying a proper contribution so that they get a proper pension when they retire.
That was a by-product of the Government breaking the link between earnings and the State retirement pension in 1980, and we are still waiting for them to say what they intend to do about it. If they leave it much longer—certainly for the lifetime of this Parliament—they will cause catastrophic damage to a system that will provide for 10 million people a pension that is above the means test and will get them off supplementary pension. It is something that they have paid for and contributed to and is related to their best 20 years of earnings. The scheme went through the House with the approval of the Conservative party.
The Government claim that they have done nothing to change the Social Security Pensions Act 1975. They are dead right. They have changed the Social Security Act 1975 by breaking the pension link with earnings. That is where the knock-over effect has come. One day soon, if not tonight, Ministers will have to come clean in relation to half the working population.
I want now to refer to what the Prime Minister has said and to what might be in waiting for pensioners next year. At Question Time on one or two occasions in the last few weeks the Prime Minister has been under pressure from Labour Members—and also from the right hon. Member for Chesham and Amersham (Sir I. Gilmour). He got his comeuppance at the end of Question Time, after the Prime Minister had avoided giving a commitment to protect, in line with prices, supplementary benefits to the unemployed. She said to the right hon. Member:
As my right hon. Friend will know, many of those who receive short-term benefits receive supplementary benefit if the amounts are inadequate for their purposes. For example, the unemployed often receive a rather larger proportion of their income from supplementary benefit than from unemployment pay. However, I cannot go further than the promises I have given upon which"—
and here she put in the knife—
my right hon. Friend fought the last election." — [Official Report, 14 July 1983; Vol. 45, c. 1022.]
The right hon. Gentleman has not come to the House tonight to deliver one of his speeches, so I shall make one for him. The Tory manifesto, on page 26, boasts:
Supplementary benefits, too, have been raised ahead of prices.
We are talking of the safety net below which no person would be expected to survive—supplementary benefit, means-tested. In the last few years there have been frequent assurances by Ministers. For example, the present Secretary of State for the Environmment said:
The guarantee that really matters is the guarantee against rising prices … long term benefits, as well as short-term benefits, should be increased at least in line with the movement of prices." — [Official Report, 13 June 1979; Vol. 986, c. 439.]
The then Chancellor of the Exchequer—now Foreign Secretary—said that
any civilised society should provide a safety net below which a poor person's standard of living should not fall.
In the same debate he said:
Accordingly, we propose that supplementary benefit rates, too, will be increased next November in line with the projected level of prices."—[Official Report, 26 March 1980, Vol. 981, c. 1458–9.]
The then the Secretary of State for Social Services, now Secretary of State for the Environment, said:


The Government are determined to maintain the safety net for the poorest people and accordingly the scale rates of short-term supplementary benefit will be fully price-protected".[Official Report, 27 March 1980; Vol. 981, c. 1659.]
The same right hon. Gentleman, on Second Reading of the Social Security (No. 2) Bill in 1980, which cut 5p in the pound off five different benefits and abolished earnings-related supplement, causing the unemployed a loss of £11 a week, said:
In particular, we will ensure that retirement pensions are protected against rising prices, that needy families with children are given extra help through family income supplement and the child addition for lone parents, and that the safety net below which none shall fall is maintained intact and fully price protected." — [Official Report, 15 April 1980, Vol. 982, c. 1033.]
I shall not refer to some of the other quotations that I intend to use because I want to refer to one that is nearer home. The statement was made before the general election, and the Prime Minister has clearly shown that she has changed her mandate during the election. The then Chancellor, the present Foreign Secretary, said in his Budget statement:
While we need to ensure that social security benefits go to those most in need",
he was concerned that people should not be discouraged from saving. He was making his point about the change from £2,000 to £3,000 for the capital limit of supplementary benefit. He had already claimed:
The uprating this November will be based on the rise in prices in the 12 months".—[Official Report, 15 March 1983, Vol. 39, c. 143–4.]
Let us not argue about May to May or November to November; it was just the "rise in prices". To avoid any doubt, I shall give one quote since the election, from the present Secretary of State who said:
However, in the case of supplementary benefit, which goes to those most in need, I propose to increase all scale rates, including those for supplementary pension, by a higher amount of 4–3 per cent."—[Official Report, 23 June 1983; Vol. 44, c. 162.]
That is basically in line with prices.
What I, my right hon. and hon. Friends and the country are entitled to know is why the Prime Minister will not give a straight answer when she is asked a straight question. Given all those statements from her Ministers, all of whom are still in her Government, why can she not bring herself to say that the safety net for the poor, which is supplementary beenefit, below which none shall fall, and which is for the most needy people in our society, will be protected in line with prices? If she cannot or will not say that, it is incumbent upon the Under-Secretary, given his record before he became a Minister and, in many respects, his record since becoming a Minister, to make that statement. He should tell the House that all the quotations that I have read to the House, directly from Hansard, are still Government policy. They were Government policy when they were made from the Dispatch Box and he should say that they remain Government policy today. If he does that, we can call upon him to resign when the Government start to cut benefit.
There is much uncertainty, which has been started by the Prime Minister and fed by the Chancellor of the Exchequer, who has made it clear that he thinks that the unemployed are getting too much. As my hon. Friend the Member for Dunfermline, East said earlier today in his maiden speech, when he quoted the article written by Sam Brittan — that article is lost to the readers of the Financial Times, but gained by those who receive those

little circulars that travel around the City and occasionally find their way into this place—it is unethical to tackle the problem that the Government think that they have by cutting the income to the unemployed. As the Prime Minister has said, the vast majority of the income to the unemployed is means-tested supplementary benefit. It would be a moral outrage for the Government to change this, having claimed in their manifesto that supplementary benefits have been raised above prices, the implication being, "Our record is good, vote for us and we shall carry on doing this great job." That is the inference that anyone reading the manifesto would rightly draw.
If the Under-Secretary says nothing else in the next 20 minutes or so, we should like him to make that statement. We shall vote against the resolution that cuts supplementary benefit to the so-called voluntarily unemployed, but at least some of those who live on means-tested benefits, on the edges and just below the line of poverty, may be able to live and sleep a little more easily for a few more weeks.

The Under-Secretary of State for Health and Social Security (Mr. Tony Newton): In the language of the House, we have had a wide-ranging debate, one commensurate with the breadth of the orders and regulations—all eight complicated sets of them.
I associate myself with what the hon. Member for Birmingham, Perry Barr (Mr. Rooker) and a number of hon. Members on both sides of the House have said about the impressive maiden speech of the hon. Member for Dunfermline, East (Mr. Brown). So many compliments have been paid to him that it would be almost superfluous for me to add to them, but it was just the speech that an hon. Member should make for his maiden speech, not because I agreed with every word of it — the hon. Gentleman would not expect that—but because it was wide ranging, powerful and formidably argued. It is clear that we have a significant addition to the potential contributors to our social security debates.
I sense from the debate that there is increased interest and greater expertise in social security matters on both sides of the House. That is likely to improve our debates, even if it makes them more uncomfortable for Ministers. For once, the complaint of the hon. Member for Pontypridd (Mr. John) about the lack of time for the debate, which we have noted, is justified. In the past, we have had complaints about lack of time and then found that the Opposition Whips have had to make desperate attempts to drag hon. Members into the Chamber to spin out time at the end of a debate.
I start by taking up the points raised by the hon. Member for Perry Barr, lest it be thought that I might be tempted to dodge them. As far as I could judge, he read out accurately a number of reasonable statements which accurately expressed what the Government were doing in a series of upratings, including the present one, over a, long period. As he knows, because of the Rossi index—I see that its progenitor has modestly stayed away — the increase in supplementary benefits this year is larger, at 4·3 per cent., than the increase in other benefits. That is a fact. I state it and restate it and, in that sense, confirm the statements read out by the hon. Member for Perry Barr.
However, the hon. Member, when referring to the Conservative manifesto, neglected to say that the statement of fact about supplementary benefits came after


a sentence which specifically limited our pledge to pensions and other linked long-term benefits. There is nothing sinister about that. The Government have made it clear for many years that they do not think it right, in difficult economic circumstances, to continue piling pledge after pledge on those that have already been made and commit Governments for all time, regardless of circumstances that cannot be forecast.
The only sensible thing for me to say to the hon. Member for Perry Barr is that the next uprating is nearly 11 months away and that it would be irresponsible and wrong for any Government to start making new commitments about the nature of that uprating. I remind Opposition Members that their profligate tendencies to make wild promises about social security spending are one reason why they are in opposition and we are in government.
It is tempting to range widely and to avoid some of the difficult detailed questions that have been put to me. I hope that the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) and my hon. Friend the Member for Kensington (Sir B. Rhys Williams) will forgive me if I do not follow them into the total reform of the social security system that they advocated. I have little more than 15 minutes left before the end of the debate.
The hon. Member for Pontypridd, my hon. Friend the Member for Kensington and the hon. Member for Gower (Mr. Wardell) mentioned incentives to work and the earnings disregard, as did the hon. Member for Perry Barr when talking about the position of single parent families, which we significantly improved in the uprating to which he referred.
Any improvement in earnings disregards must, by definition, mean extending additional benefit entitlement to those who are not the worst-off beneficiaries. By definition, they have other income. Therefore, at a time when we have to examine priorities carefully, we have generally taken the view in the past year that we should concentrate additional benefit expenditure on those who have no additional income. We must keep the position under review and I recognise the force of some of the points that have been made, but that is the basis on which we have operated. In all these issues the Government have to strike a balance between different and often conflicting considerations.
The hon. Member for Denton and Reddish (Mr. Bennett) spoke about the amount of unclaimed benefit. He complained that the current estimates, as he rightly said, go back to a survey that was mounted in 1979. An analysis of the 1981 family expenditure survey should be available shortly, and if it becomes available in the recess I shall try to write to the hon. Gentleman and pass on any information that he may find helpful. I accept that 1981 will still not be the perfect answer, but at least it is two years better than 1979, of which he spoke.
I come now to some of the more detailed matters that were raised, in particular those about the board and lodging regulations. My hon. Friend fully explained the background to the proposed changes in paragraphs 9(4) and 9(5) of the relevant regulations. The hon. Members for Pontypridd and for Gower spoke about unscrupulous landlords. The policing and control of housing standards is not a matter for the DHSS. To those who say to me, "You are just trying to push the responsibility on to local

authorities," where it properly belongs, I reply, "What would you think if a beneficiary went to a DHSS office and said that he had found a room, and as he did not have the money to pay for it he wanted that office to pay for it, as he qualified, to which the DHSS office replied that it did not approve of the room, so it would not pay, and that he would have to find an approved room before it would pay for a roof over his head?" In my opinion, it would not be sensible or acceptable for the DHSS to choose what a claimant might do with his money. That, in effect, is what would happen if our local offices were asked to become the police of accommodation standards. However, I do not dismiss the anxiety. I simply say that it is a matter for the local authorities, as I think they themselves would recognise.
In answer to a comment of the hon. Member for Gower, I see no reason why the changes in the rules should affect the hostels that are provided by Women's Aid, or whatever. We hope that housing associations and similar bodies will consult about the setting of local limits. It is a matter for the local supplementary benefit officers, but I understand that the chief supplementary benefit officer will issue guidance on how the limits should be determined and will say specifically the local housing aid associations should be consulted. Similarly, we expect that the advice will suggest that benefit officers should review the limits at least annually, and more often if necessary because of local circumstances. I can give no guarantee about the local circumstances that the hon. Gentleman described, but there is certainly room for a summer and winter difference to be taken into account in the administration of the regulations.
Anxiety was expressed, quite forcefully, by the hon. Member for Pontypridd and my hon. Friend the Member for Saffron Walden (Mr. Haselhurst) about certain aspects of the regulations. The hon. Member for Pontypridd referred to the administration. I entirely accept his argument, which was that of the social security advisory committee, that the new system will work as we intend only if the limits are properly set. I have already said that guidance will be issued by the chief supplementary benefit officer, and we are working closely with him to make sure that the new system works in the way that both the hon. Gentlemen and I would like. We are making arrangements to monitor the effects that the new limits have on claimants and the accommodation provided for them. Local limits will be set by reference to the charges made for that type of accommodation in the area. In response to my hon. Friend the Member for Saffron Walden, who was concerned about the speed of the monitoring and survey work and the effect on claimants, may I say that we hope it will be conducted with what, by the Government's standards, is real speed—that is, in August, September and October of this year. I hope that that will reassure my hon. Friend.
The hon. Member for Pontypridd referred to his doubts about the exclusion of claimants in receipt of the long-term supplementary benefit rate from the former list of those who qualified for an extension of some kind. Merely being in receipt of the long-term supplementary benefit rate does not necessarily mean that there are special housing needs, which is what the policy is directed towards. It is important to remember that single parents will benefit significantly if they qualify from improvements to the children's limits, which is one of the points on which we responded to the comments of the social security advisory committee.


Children aged 11 or over will receive the adult local limit. Children under 11 will receive one ar d a half times the scale rate. That is in response to the SSAC and will help the position of single parents generally under the regulations. If the survey shows that there is a problem of the kind that the hon. Gentleman fears but which we do not expect at present, we would urgently consider what might be done.
My hon. Friend the Member for Saffron Walden, with his honourable, welcome and valuable connection with Turning Point and the work that it does for drug and alcohol abuse, asked me to make it clear within which category the sort of hostels with which he was concerned would come. There will be the limit for ordinary board and lodging accommodation but the extension of £15·35 will be available if the charge exceeds the local limit. My hon. Friend also suggested that there should be a separate category to cover the sort of hostels with which he is concerned in order to remove or ease the problems that are exercising him. The three categories that we have listed will cover the majority of claimants, but once again if the survey shows that that is not so we shall urgently consider what has to be done.
Lastly, my hon. Friend asked about the position of alcoholics and drug addicts who had been excluded from the transitional provisions that we have introduced to protect others who might be affected by the withdrawal of provisions in the current regulation 9(5). Our view is that those hostels have, in effect, benefited from what it may be unfair to call a loophole but which was certainly a wholly unintended effect of the regulations. Therefore, we did not think it right to provide transitional protection in those cases as distinct from the others. We are simply returning to the position as it was thought to be a few months ago, and I think that that is reasonable. Again, I can refer to the survey.
The board and lodging limits are an improvement and will bring additional help to important groups of claimants, particularly with the increased extensions. I am not in any way suggesting that Turning Point, or many other bodies, have behaved improperly or are necessarily charging too much for the services in their hostels. We are simply saying that the charges that they make include charges for purposes especially of rehabilitation and, in some cases, health care, which go beyond what the supplementary benefit system is properly intended, or ought to be expected, to meet. We are anxious to ensure that the risk does not arise whereby other authorities with clear statutory responsibilities to provide for rehabilitation and care would be in a position simply to pass their bills on to the supplementary benefit system. We do not think that that would be satisfactory.

Mr. Haselhurst: Does my hon. Friend accept that there are certain categories in the amended regulations wherein the limit fixed will be higher than that which is likely to be fixed for those hostels that deal with drug addicts and alcoholics? If the Department can pay that, why cannot it recognise the special case of the drug hostels?

Mr. Newton: I shall consider my hon. Friend's point further. We need to monitor the changes carefully. It has not simply been our purpose to minimise: our bill. I hope that it is clear from what we have said tonight that we are concerned to ensure that there is adequate help and support

available through the supplementary benefit system to meet the housing needs of those with supplementary benefit needs. We want to draw a sustainable line between the costs that should be met under supplementary benefit and those that should more properly be met by local authorities, and especially local authority social service departments. If we find that we have not achieved that, we shall reconsider the position.
Much of the debate has concentrated on the voluntary unemployment deductions. I am glad that there; was relatively little talk about the administrative difficulties of the system that have emerged, which no one is seeking to defend. My hon. Friend the Minister is making vigorous efforts to correct them.
I shall concentrate my remarks on the questions of principle and policy that arise in relation to the voluntary unemployment deductions. I was astonished by some of the remarks of Opposition Members, including those of the hon. Member for Dunfermline, East in his maiden speech. There was no recognition that the deduction is related to those who have left their jobs voluntarily or been sacked for misconduct. It is possible to argue about the machinery, but it has existed not only under this Government but under Labour Governments.
There appears to have been a challenge to the whole principle, and that goes beyond what the public or any Conservative Member would think reasonable. Is the hon. Member for Pontypridd suggesting that a man who leaves his work voluntarily and does not receive unemployment benefit should receive it? Is he saying that a man who insures against unemployment and then becomes voluntarily unemployed should nevertheless receive that insurance benefit? If so, that, is an extraordinary notion.
If the hon. Gentleman is not suggesting that unemployment benefit should be paid, how can it make sense to suggest that supplementary benefit should be paid so that anything that a man loses on unemployment benefit would be picked up on supplementary benefit? Under the regulations the withdrawal of unemployment benefit stands clear. It makes no sense to have a withdrawal of unemployment benefit if there is no penalty because supplementary benefit makes up the difference. I am astonished that Opposition Members should pursue that tack.
Another point that has not been properly explored is the categories of people who will be affected. My hon. Friend the Minister rightly mentioned the inspectors' report. In the years before 1980, when the Labour party was in office, the unemployment benefit deductions at the reduced level of 20 per cent, were going to only 2 per cent, of the relevant claimants. After our changes the figure jumped to 34 per cent. It is now suggested that if we move back from 34 per cent, it will mean that the wicked Tory Government are grinding the faces of the poor. Yet all we are doing is returning to the previous position.
Are Opposition Members saying that, although unemployment rose sharply under their Government, not only did they do nothing about the massive hardship but they did not even notice that it existed? All that we are proposing is a return to the position that existed in the supplementary benefit system when it was operated by the Opposition. That is a good illustration of the extent to which the arguments put forward by the Opposition tonight are bogus and do not hang together. They will be strongly rejected by Conservative Members.

Question put and agreed to.

Resolved,
That the draft Social Security Benefits Up-rating Order 1983, which was laid before this House on 5th July, be approved.

Resolved,
That the draft Supplementary Benefit Up-rating Regulations 1983, which were laid before this House on 7th July, be approved.
That the draft Child Benefit (Up-rating) Regulations 1983, which were laid before this House on 7th July, be approved.
That the draft Family Income Supplements (Computation) Regulations 1983, which were laid before this House on 7th July, be approved.
That the draft Housing Benefits (Increase of Needs Allowances) Regulations 1983, which were laid before this House on 7th July, be approved.
That the draft Pensioners' Lump Sum Payments Order 1983, which was laid before this House on 7th July, be approved.—[Dr. Boyson.]

Mr. Speaker: I understand that motion No. 7 is not moved.

Motion made, and Question put,
That the draft Supplementary Benefit (Requirements, Resources and Single Payments) Amendment Regulations 1983, which were laid before this House on 8th July, be approved.—[Dr. Boyson.]

The House divided: Ayes 284, Noes 166.

Division No.44]
[10 pm


AYES


Adley, Robert
Douglas-Hamilton, Lord J.


Aitken, Jonathan
Dover, Denshore


Alexander, Richard
Dunn, Robert


Alison, Rt Hon Michael
Durant, Tony


Amery, Rt Hon Julian
Dykes, Hugh


Amess, David
Eggar, Tim


Arnold, Tom
Evennett, David


Ashby, David
Eyre, Reginald


Aspinwall, Jack
Fallon, Michael


Atkins, Robert (South Ribble)
Farr, John


Atkinson, David (B'm'th E)
Favell, Anthony


Baker, Nicholas (N Dorset)
Finsberg, Geoffrey


Baldry, Anthony
Fookes, Miss Janet


Batiste, Spencer
Forman, Nigel


Beaumont-Dark, Anthony
Forsyth, Michael (Stirling)


Bellingham, Henry
Forth, Eric


Benyon, William
Fowler, Rt Hon Norman


Bevan, David Gilroy
Franks, Cecil


Biffen, Rt Hon John
Fraser, Peter (Angus East)


Biggs-Davison, Sir John
Freeman, Roger


Blackburn, John
Fry, Peter


Body, Richard
Gale, Roger


Boscawen, Hon Robert
Galley, Roy


Bottomley, Peter
Goodlad, Alastair


Bowden, A. (Brighton K'to'n)
Gow, Ian


Bowden, Gerald (Dulwich)
Gower, Sir Raymond


Boyson, Dr Rhodes
Greenway, Harry


Brandon-Bravo, Martin
Gregory, Conal


Brooke, Hon Peter
Griffiths, E. (B'y St Edm'ds)


Brown, M. (Brigg &amp; Cl'thpes)
Griffiths, Peter (Portsm'th N)


Bruinvels, Peter
Ground, Patrick


Bryan, Sir Paul
Grylls, Michael


Burt, Alistair
Gummer, John Selwyn


Butterfill, John
Hamilton, Neil (Tatton)


Carttiss, Michael
Hampson, Dr Keith


Chapman, Sydney
Hanley, Jeremy


Chope, Christopher
Hargreaves, Kenneth


Clark, Dr Michael (Rochford)
Harris, David


Clegg, Sir Walter
Harvey, Robert


Colvin, Michael
Haselhurst, Alan


Conway, Derek
Havers, Rt Hon Sir Michael


Coombs, Simon
Hawkins, C. (High Peak)


Cope, John
Hawkins, Sir Paul (SW N'folk)


Couchman, James
Hawksley, Warren


Crouch, David
Hayhoe, Barney


Currie, Mrs Edwina
Hayward, Robert


Dorrell, Stephen
Heathcoat-Amory, David





Heddle, John
Moate, Roger


Henderson, Barry
Montgomery, Fergus


Hickmet, Richard
Morris, M. (N'hampton, S)


Hicks, Robert
Morrison, Hon C. (Devizes)


Higgins, Rt Hon Terence L.
Moynihan, Hon C.


Hill, James
Mudd, David


Hirst, Michael
Murphy, Christopher


Hogg, Hon Douglas (Gr'th'm)
Neale, Gerrard


Holland, Sir Philip (Gedling)
Needham, Richard


Holt, Richard
Nelson, Anthony


Hooson, Tom
Neubert, Michael


Howard, Michael
Newton, Tony


Howarth, Alan (Stratfd-on-A)
Nicholls, Patrick


Howarth, Gerald (Cannock)
Normanton, Tom


Howell, Rt Hon D. (G'ldford)
Norris, Steven


Howell, Ralph (N Norfolk)
Onslow, Cranley


Hubbard-Miles, Peter
Osborn, Sir John


Hunt, David (Wirral)
Ottaway, Richard


Hunt, John (Ravensbourne)
Page, John (Harrow W)


Hunter, Andrew
Page, Richard (Herts SW)


Hurd, Rt Hon Douglas
Parkinson, Rt Hon Cecil


Jackson, Robert
Parris, Matthew


Jessel, Toby
Patten, John (Oxford)


Johnson-Smith, Sir Geoffrey
Pattie, Geoffrey


Jones, Gwilym (Cardiff N)
Pawsey, James


Jones, Robert (W Herts)
Peacock, Mrs Elizabeth


Joseph, Rt Hon Sir Keith
Percival, Rt Hon Sir Ian


Kellett-Bowman, Mrs Elaine
Pink, R. Bonner


Kershaw, Sir Anthony
Porter, Barry


Key, Robert
Powell, William (Corby)


Kilfedder, James A.
Powley, John


King, Roger (B'ham N'field)
Prentice, Rt Hon Reg


King, Rt Hon Tom
Price, Sir David


Knight, Gregory (Derby N)
Raffan, Keith


Knowles, Michael
Rhodes James, Robert


Knox, David
Rhys Williams, Sir Brandon


Lamont, Norman
Ridley, Rt Hon Nicholas


Lang, Ian
Ridsdale, Sir Julian


Latham, Michael
Robinson, Mark (N'port W)


Lawler, Geoffrey
Roe, Mrs Marion


Lawrence, Ivan
Rossi, Sir Hugh


Lawson, Rt Hon Nigel
Rowe, Andrew


Lee, John (Pendle)
Rumbold, Mrs Angela


Leigh, Edward (Gainsbor'gh)
Ryder, Richard


Lennox-Boyd, Hon Mark
Sackville, Hon Thomas


Lester, Jim
Sainsbury, Hon Timothy


Lewis, Sir Kenneth (Stamf'd)
St. John-Stevas, Rt Hon N.


Lightbown, David
Sayeed, Jonathan


Lloyd, Ian (Havant)
Shaw, Sir Michael (Scarb1)


Lloyd, Peter, (Fareham)
Shelton, William (Streatham)


Lord, Michael
Shepherd, Colin (Hereford)


Luce, Richard
Silvester, Fred


Lyell, Nicholas
Sims, Roger


McCrindle, Robert
Skeet, T. H. H.


McCurley, Mrs Anna
Smith, Tim (Beaconsfield)


Macfarlane, Neil
Soames, Hon Nicholas


MacGregor, John
Speller, Tony


MacKay, Andrew (Berkshire)
Spence, John


MacKay, John (Argyll &amp; Bute)
Spencer, D.


Macmillan, Rt Hon M.
Spicer, Jim (W Dorset)


McNair-Wilson, P. (New F'st)
Spicer, Michael (S Worcs)


McQuarrie, Albert
Squire, Robin


Madel, David
Stanbrook, Ivor


Major, John
Stern, Michael


Malins, Humfrey
Stevens, Lewis (Nuneaton)


Malone, Gerald
Stevens, Martin (Fulham)


Maples, John
Stewart, Allan (Eastwood)


Marland, Paul
Stewart, Andrew (Sherwood)


Marlow, Antony
Stewart, Ian (N Hertf'dshire)


Mates, Michael
Stokes, John


Mather, Carol
Stradling Thomas, J.


Maude, Francis
Taylor, John (Solihull)


Mawhinney, Dr Brian
Taylor, Teddy (S'end E)


Maxwell-Hyslop, Robin
Tebbit, Rt Hon Norman


Mayhew, Sir Patrick
Temple-Morris, Peter


Mellor, David
Terlezki, Stefan


Merchant, Piers
Thomas, Rt Hon Peter


Meyer, Sir Anthony
Thompson, Donald (Calder V)


Miller, Hal (B'grove)
Thompson, Patrick (N'ich N)


Mills, Iain (Meriden)
Thome, Neil (Ilford S)






Thornton, Malcolm
Wells, John (Maidstone)


Tracey, Richard
Wheeler, John


Trotter, Neville
Whitfield, John


Twinn, Dr Ian
Whitney, Raymond


van Straubenzee, Sir W.
Wilkinson, John


Vaughan, Dr Gerard
Winterton, Mrs Ann


Viggers, Peter
Wintertor, Nicholas


Waddington, David
Wolfson, Mark


Wakeham, Rt Hon John
Wood, Timothy


Waldegrave, Hon William
Woodcock, Michael


Walden, George
Yeo, Tim


Walker, Bill (T'side N)
Young, Sir George (Acton)


Waller, Gary
Younger, Rt Hon George


Ward, John



Wardle, C. (Bexhill)
Tellers for the Ayes:


Warren, Kenneth
Mr. Trisan Garel-Jones and


Wells, Bowen (Hertford)
Mr. Archie Hamilton.


NOES


Abse, Leo
Coleman, Donald


Archer, Rt Hon Peter
Concannon, Rt Hon J. D.


Ashley, Rt Hon Jack
Conlan, Bernard


Ashton, Joe
Cook, Frank (Stockton North)


Atkinson, N. (Tottenham)
Corbett, Fiobin


Bagier, Gordon A. T.
Corbyn, Joremy


Banks, Tony (Newham NW)
Cox, Thomas (Tooting)


Barnett, Guy
Craigen, J. M.


Barron, Kevin
Crowther, Stan


Beckett, Mrs Margaret
Davies, Rt Hon Denzil (L'lli)


Beith, A. J.
Davies, Ronald (Caerphilly)


Bell, Stuart
Davis, Terry (B'ham, H'ge H'I)


Bennett, A. (Dent'n &amp; Red'sh)
Deakins, Eiric


Bermingham, Gerald
Dewar, Donald


Bidwell, Sydney
Dixon, Donald


Blair, Anthony
Dobson, Frank


Boothroyd, Miss Betty
Dormand, Jack


Boyes, Roland
Dubs, Alfrud


Bray, Dr Jeremy
Duffy, A. E P.


Brown, Gordon (D'f'mline E)
Eastham, Ken


Brown, Hugh D. (Provan)
Edwards, R. (W'hampt'n SE)


Brown, N. (N'c'tle-u-Tyne E)
Evans, loan (Cynon Valley)


Brown, R. (N'c'tle-u-Tyne N)
Evans, John (St. Helens N)


Brown, Ron (E'burgh, Leith)
Fatchett, Derek


Bruce, Malcolm
Faulds, Andrew


Buchan, Norman
Field, Frank (Birkenhead)


Caborn, Richard
Fields, T. (L'pool Broad Gn)


Callaghan, Jim (Heyw'd &amp; M)
Fisher, Mark


Campbell-Savours, Dale
Flannery, Martin


Carlile, Alexander (Montg'y)
Foot, Rt Hun Michael


Clark, Dr David (S Shields)
Forrester, John


Clarke, Thomas
Foster, Derek


Clay, Robert
Fraser, J. (Norwood)


Cocks, Rt Hon M. (Bristol S.)
Freeson, Rt Hon Reginald


Cohen, Harry
Godman, Dr Norman





Golding, John
Morris, Rt Hon J. (Aberavon)


Gould, Bryan
Nellist, David


Hamilton, James (M'well N)
O'Brien, William


Hamilton, W. W. (Central Fife)
Orme, Rt Hon Stanley


Hardy, Peter
Park, George


Harman, Ms Harriet
Parry, Robert


Harrison, Rt Hon Walter
Pavitt, Laurie


Hattersley, Rt Hon Roy
Penhaligon, David


Healey, Rt Hon Denis
Pike, Peter


Heffer, Eric S.
Powell, Raymond (Ogmore)


Hogg, N. (C'nauld &amp; Kilsyth)
Prescott, John


Holland, Stuart (Vauxhall)
Radice, Giles


Home Robertson, John
Redmond, M.


Howell, Rt Hon D. (S'heath)
Rees, Rt Hon M. (Leeds S)


Hoyle, Douglas
Richardson, Ms Jo


Hughes, Mark (Durham)
Roberts, Allan (Bootle)


Hughes, Robert (Aberdeen N)
Roberts, Ernest (Hackney N)


Hughes, Roy (Newport East)
Robinson, G. (Coventry NW)


Hughes, Sean (Knowsley S)
Rogers, Allan


Janner, Hon Greville
Rooker, J. W.


John, Brynmor
Ross, Ernest (Dundee W)


Jones, Barry (Alyn &amp; Deeside)
Rowlands, Ted


Kaufman, Rt Hon Gerald
Sedgemore, Brian


Kilroy-Silk, Robert
Sheerman, Barry


Kirkwood, Archibald
Sheldon, Rt Hon R.


Lamond, James
Shore, Rt Hon Peter


Leighton, Ronald
Short, Ms Clare (Ladywood)


Lewis, Ron (Carlisle)
Skinner, Dennis


Lewis, Terence (Worsley)
Smith, C.(Isl'ton S &amp; F'bury)


Litherland, Robert
Soley, Clive


Lloyd, Tony (Stretford)
Spearing, Nigel


Lofthouse, Geoffrey
Straw, Jack


McCartney, Hugh
Thomas, Dr R. (Carmarthen)


McDonald, Dr Oonagh
Thompson, J. (Wansbeck)


McGuire, Michael
Tinn, James


McKelvey, William
Varley, Rt Hon Eric G.


Mackenzie, Rt Hon Gregor
Wainwright, R.


McNamara, Kevin
Warden, Gareth (Gower)


McTaggart, Robert
Wareing, Robert


McWilliam, John
Welsh, Michael


Madden, Max
Wig ley, Dafydd


Marek, Dr John
Williams, Rt Hon A.


Maxton, John
Wilson, Gordon


Maynard, Miss Joan
Winnick, David


Meacher, Michael
Woodall, Alec


Meadowcroft, Michael
Young, David (Bolton SE)


Michie, William



Mikardo, Ian
Tellers for the Noes:


Millan, Rt Hon Bruce
Mr. Harry Cowans and


Mitchell, Austin (G't Grimsby)
Mr. Frank Haynes.


Morris, Rt Hon A. (W'shawe)

Question accordingly agreed to.

Benefit

Mr. Derek Foster: I beg to move
That an humble Address be presented to Her Majesty, praying that the Housing Benefits Amendment Regulations 1983 (S.I., 1983, No. 1014), dated 14thJuly 1983, a copy of which was laid before this House on 18th July, be annulled.

Mr. Speaker: I understand that it will be convenient to discuss at the same time the following motions:
That an humble Address be presented to Her Majesty, praying that the Housing Benefits (Transitional) Amendment (No. 2) Regulations 1983 (S.I., 1983, No. 912), dated 28th June 1983, a copy of which was laid before this House on 30th June, be annulled.
That an humble Address be presented to Her Majesty, praying that the Supplementary Benefit (Miscellaneous Amendments) Regulations 1983 (S.I., 1983, No. 1000), dated 13th July 1983, a copy of which was laid before this House on 14th July, be annulled.
That an humble Address be presented to Her Majesty, praying that the Social Security Benefit (Dependency) Amendment Regulations 1983 (S.I., 1983, No. 1001), dated 13th July 1983, a copy of which was laid before this House on 14th July, be annulled.
That an humble Address be presented to Her Majesty, praying that the Supplementary Benefit (Equal Treatment) Regulations 1983 (S.I., 1983, No. 1004), dated 13th July 1983, a copy of which was laid before this House on 14th July, be annulled.
That an humble Address be presented to Her Majesty, praying that the Family Income Supplements (Miscellaneous Amendments) Regulations 1983 (S.I., 1983, No. 1003), dated 13th July 1983, a copy of which was laid before this House on 14th July, be annulled.

Mr. Foster: We are about to debate some complex issues. I have a number of remarks to make which, to begin with, are concerned with housing benefits. The first motion I want to refer to is the Housing Benefits (Transitional) Amendment (No. 2) Regulations 1983. In a few areas, the housing benefit scheme has not been completely implemented. These regulations extend the deadline by a further three months. The housing benefit scheme is an important change in the social security system, and 2·5 million households—one in eight—are losing as a result. In my area 75 per cent, of council tenants receive housing benefits whereas in 1979 only 25 per cent, were in receipt of benefits. That has resulted largely from two things — the doubling of rents under this Government and the substantial increase in unemployment.
Some people suspect that we have had this change because the Government want to save a few hundred jobs in the Department of Health and Social Security and have therefore off-loaded the responsibilities on to local authorities.
In a recent debate the Under-Secretary said that one third of all authorities were unable to implement the scheme on vesting day. When pressed to say which local authorities and how many tenants were involved, he and his hon. Friends on the Front Bench were reluctant to give that information. In answer to a question two or three weeks, ago, the Minister of State said that only 15 authorities were having difficulty. When he was pressed to name those authorities and say how many tenants were involved he was unable to do so but promised to make a statement in the near future. The Minister will perhaps break his silence tonight and give us that information.

Mr. Robin Corbett: Will my hon. Friend accept from me that Birmingham is one

of the cities in almost complete chaos? The scheme was introduced by the hon. Member for Derbyshire, South (Mrs. Currie) as chairman of the housing committee. Such is the chaos that many of my constituents, and those of other hon. Members in the city, are coming to advice surgeries with eviction notices, or something not far short, received from the city's housing department because it cannot cope with the scheme.

Mr. Foster: I am grateful to my hon. Friend for that intervention. Birmingham is one of the authorities that has experienced difficulties. I intend to name one or two more.
The inescapable conclusion to be drawn three and a half months after the start of the housing benefits scheme is that its implementation has been disastrously bungled. There is widespread evidence of confused claimants, many of whom are still not receiving their correct benefit, of harassed local authority officials desperately trying to get to grips with the scheme's requirements and with a huge backlog of unprocessed applications and perplexed housing association staff wondering what to do about the escalating levels of rent arrears caused by tenants not receiving enought or, in some cases, any money with which to pay their rent.
Judging by its public statements, to which I have already referred, the Department appears surprisingly unaware of the extent of the problem.
In a recent answer the Minister said:
Our information is that of the 500 authorities, only 15 are now experiencing difficulties." — [Official Report, 28 June 1983; Vol. 44, c. 446.]
The Minister has been badly briefed by his officials. We know of at least 15 authorities in London alone that are experiencing great difficulties.
For example, in Brent, not unknown to the Minister, council tenants have yet to be told of their rent and rebate payments, applicable from last April, and most private tenants have been receiving only emergency payments, 150 of which are being made every day. Problems with the computer, which is shared with the London borough of Ealing, have been a major contributory factor and are still being uncovered. Computer problems are also reported to have caused serious delays in Bromley. In Kensington and Chelsea tenants have had no benefit three and a half months after the scheme was due to start. Similar problems are reported in Barnet where, six weeks after the start date, 7,000 private sector tenant cases were outstanding. In Southwark a backlog of 6,000 cases still to be processed was reported at the end of June. In Lambeth the latest estimate of the backlog is 11,000. While the majority of Lambeth rent allowance recipients are still being paid benefit at the old rate, it is estimated that 10 per cent, of claimants are getting no payments at all. Some of the worst problems have been in Hackney, where rent allowance cases have not been assessed since last November and new applicants dating back to last October are still waiting for assessment.
I could go on at much greater length, but I do not want to weary the House. It is obvious that in London alone at least 15 authorities are having major difficulties. Those examples are only from London. Reports from a wider area show that it seems likely that most local authorities in Britain are experiencing difficulties with housing benefits. Some of the largest metropolitan authorities, such as Birmingham and Manchester, appear to be suffering acute problems. Therefore, the departmental


view that only a few authorities are having difficulties and that these are only teething troubles appears grossly optimistic and ill-informed.
There seems to be some inconsistency between those views and the Department's actions. The regulations make provision for a further extension of the period during which claimants can be paid on the old basis when it has not proved possible for housing benefit assessment to be made. The provision has been extended to the end of September in standard cases and to the end of December in certificated cases.
It is not difficult to find the reasons why the scheme is in such great chaos. There are three outstanding reasons. The first is the extreme complexity of the scheme, especially when it is remembered that it was supposed to simplify the previous one. It is much more complicated than the arrangements that it replaced. That complexity goes a long way to explain the confusion of the public and local authority administrators when confronted with the housing benefits scheme.
The second reason is the no extra cost constraint imposed by the Government against the advice of Professor David Donnison. It has had two serious consequences. First, it has made many people worse off. Between 2,500,000 and 3,000,000 households — approximately one in eight of all households in Britain — are losing benefit as a result of the scheme. Secondly, it has led to the creation of some of the worst complexities of the scheme, such as the housing benefits supplement and the transitional addition, which is designed to mitigate some of the worst losses.
However, the final straw in the implementation of the scheme was the rushed timetable. It has been argued that the local authority associations agreed to it, but when it was set, long before the detailed regulations were available, local authorities had only a general understanding of the scheme. They had no idea of the complexities that would be involved, for example, in rebating heating charges in certificated cases or making different levels of deduction for non-dependents living in claimants' households. They also did not believe that the DHSS would continue to amend the regulations until the month before implementation and, indeed, afterwards. New sets of amending regulations have poured out of the Department this year, as have explanatory circulars. No fewer than 10 circulars on housing benefit have been issued in the past 12 months.
Local authority associations had no idea that the computer firms on which many of them depended for efficient implementation of the scheme would be equally baffled by the complexities. They also has no idea of the volume of cases, especially the very difficult housing benefits supplement cases, which have far exceeded all their estimates.
What lessons should be drawn from the experience of trying to implement the scheme? First, the DHSS and the social security advisory committee should, as an urgent priority, review ways in which the housing benefits scheme can be simplified. Among other objectives, the review should aim to make complexities such as the housing benefits supplement unnecessary, and to iron out differential treatment of standard and certificated claims in, for example, claim and payment dates and overpayment recovery procedures.
Secondly, immediate action should be taken to protect people from losing when benefits have been assessed

incorrectly or late. Housing benefits supplement especially, should be payable from the date on which the claimant first approached the local authority or the Department and there should be entitlement to backdated payment if a claimant's entitlement has been missed
Thirdly, the 1983 upratings of housing benefit should be used to help offset and overcome some of the losses experienced by claimants as a result of the new rules.
Fourthly, and perhaps most urgently of all, an independent inquiry should be set up to investigate the way in which the scheme has been implemented and to report with recommendations, first, on how the administration of the scheme can be streamlined and improved and, secondly, on how future changes in social assistance schemes should be prepared so as to avoid repeating the mistakes so obviously and profusely made so far.
Finally, I ask the Minister a series of questions. First, have not central Government washed their hands of administrative responsibility for housing benefit by offloading it to unprepared local authorities, which then take the blame for any problem that arises? Secondly, why was the scheme allowed to go ahead without a computer programme of proven ability, and what problems now exist with computer programmes? Thirdly, what percentage of claimants are dealt with within the time limits and what steps are being taken to force local authorities to comply with their obligations?
In a number of cases, local authorities have recovered overpaid housing benefits from council tenants by converting it into rent arrears without considering whether the claimant is in any way at fault. What action do the Government intend to take to ensure that local authorities do not recover overpaid benefit in that way?
What percentage of local authorities are identifying housing benefit supplement cases by carrying out a supplementary benefit assessment, and what percentage of those entitled to that benefit actually receive it? Is it not time that no more amendments to the housing benefits scheme are approved by the House until a plan for simplifying the scheme has been formulated? All additional amendments would then be measured against the objectives set out in the plan to make the scheme simpler and easier to understand.
The regulations to which the first motion relates alter the income disregards for housing benefit and some deductions that can be made when computing eligible rent. The earnings disregard is reduced from £18 to £17·45. The Government's justification for that is that personal tax allowances were increased ahead of inflation in the latest Budget. The Department applies the logic of its formula only to a single person. As the advisory committee on rent rebates and rent allowances pointed out last year, the disregard is insufficient to cover the need of a couple, only one of whom is working. Moreover, the amount allowed for travel costs in the DHSS formula has traditionally been increased only in line with the general rate of inflation. It has not reflected increases in travel costs ahead of the retail price index. Will not that provision hit those people who are in work but receive low incomes? How can that be reconciled with the Government's aim to increase work incentives? The Opposition see the measure as a back door means of obtaining cuts in the social security system.
With regard to the needs allowance, when it is generally proposed to uprate housing benefit scales by 4 per cent., the absence of any increase in the pensioner addition to the needs allowance stands out like a sore thumb, especially


as that addition was a new element that was introduced under the scheme. The lack of increase raises the question whether the Government intend to preserve the real value of the addition or to erode it just as the 1973 needs allowance addition was eroded. I hope that the Minister will clarify that point.
My first point on the third motion concerns the recovery of interim payments of benefit. At the moment, the Department cannot recover supplementary benefit overpayments which occur through no fault of the claimant. These regulations provide that excessive interim payments can be recovered freely as long as the claimant has previously signed an undertaking agreeing to such recovery if overpayment occurs. The Department wants to make this change partly because of the new system of emergency payments following the Birmingham strike. The social security advisory committee is worried that substantial overpayments could accrue to some claimants during a prolonged dispute and is unhappy at being asked to approve this change before seeing the details of the revised emergency payments system.
Why was it necessary to proceed with this change before the revised emergency payments system has been produced? Does the Department expect further industrial action as a result of staff shortages and intolerable pressure on staff time? There is cause for concern at the way in which overpayments resulting from the Birmingham dispute are being recovered. Will the Minister say whether and in what circumstances overpayments of benefit which arose through no fault of claimants but as a result of the strike are being recovered by deductions from current benefit? Under what legal powers is that being done? Does the fact that the claimant signed a statement declaring that he would pay any over payment when making the claim make any difference to the legal position? Is the Minister satisfied that no hardship is being caused?
As we know, the Department recently introduced a three-month qualifying period that claimants who are unemployed and who receive benefit must satisfy before they can take advantage of the 21-hour rule. The regulation provides that the time spent on youth opportunity or youth training scheme courses should count towards that. The social security advisory committee welcomes that relaxation, but remains unhappy about the concept of the qualifying period. The report states:
We acknowledge the difficulty of drawing a clear distinction between young people who are really continuing their full-time education supported by supplementary benefit and those who are genuinely seeking work, but are occupying their time usefully. We hope that in future it will be possible to devise a concession which meets the need more flexibly, but in the meantime we should like to see the present concession more widely publicised. We think there is a case for a special advice leaflet for school-leavers which both outlines their benefit conditions and explains the 21-hour rule and related issues. Amongst teachers and admin staff, the three-month qualifying period is felt to perpetuate pressures on the education service to modify its courses to fit in with the financial needs of claimant students, especially recent school-leavers who are not able to start 21-hour study proper till the December of the year in which they leave school. If such young people want to study part-time from September while claiming benefit, and waiting for a job, most of them are obliged to do less than 15 hours a week (including homework) for the three month period, and must then change to a different course if they want to increase their hours of study to take full advantage of the 21-hour concession.
Young people wanted examined courses which they felt employers would respect. Most courses, examined or not, start

in September. If young … claimants who wish to improve their employment chances are to take full advantage of the concession, they should be able to join courses at the beginning. The obligation to leave if a suitable job is offered would still be in force, and would safeguard against use of the concession by claimants whose main intention was to study rather than to seek employment.
I had intended to make some remarks about the equal treatment regulations, but many hon. Members wish to speak in the debate. I have asked the Minister many questions, and no doubt he will wish some time in which to answer them.

The Minister for Social Security (Dr. Rhodes Boyson): I agree with the latter comments of the hon. Member for Bishop Auckland (Mr. Foster), who has asked many questions. I can answer some of them now, but, knowing how complicated some of the regulations are, I shall have to reply to the others in writing. We shall enjoy not only our conversations this evening but some written exercise afterwards.
The matter is complicated. This is not an attempt to pass the buck of housing benefit to local authorities, which are responsible already for millions of people who receive rent and rate rebates. It was an attempt to simplify the system—[Interruption.]—I said that it was an attempt to simplify the system, and to make local authorities responsible for those in receipt of supplementary benefit.
The hon. Member for Bishop Auckland may know, but others may not, that David Donnison in the report of the Supplementary Benefits Commission of 1977 recommended clearly:
These dual arrangements give rise to major problems and dilemmas for those people.
The idea that this is a new set of problems is completely untrue. Here is an objective authority drawing attention to those problems in the past.

Mr. Andrew F. Bennett (Demon and Reddish): Will the Minister give way?

Dr. Boyson: I shall, but in doing so I shall be able to answer fewer questions. I do not know whose side the hon. Gentleman is on.

Mr. Bennett: As the Minister is quoting from the old Supplementary Benefits Commission report, will he also point out that it stressed the need for some new money if the scheme was to be introduced? Has it not gone completely wrong because the Government introduced the scheme on a shoestring?

Dr. Boyson: I shall come to that point because it is in league with what I intend to say. The report also states:
The Commission regard this state of affairs as intolerable, and as stated in last year's Report are keenly interested in the possibility of creating a single scheme of housing benefit which would cover all low-income householders".
It is, therefore, just not true to suggest that we are moving from an ideal system under which everything was running smoothly to one under which there are problems in certain parts of the country.
The hon. Member for Denton and Reddish (Mr. Bennett) no longer represents Stockport, North. He is slowly moving around the country, like an inspectorate. He must be aware that there are times when more money is not available, and we must decide whether or not to do something. The Labour party believes that it can do nothing without more money. That is its problem. It never asks whether it can better use the money that already


exists. Unlike the Labour party, we decided to do something. I am surprised that Labour Members do not commend us for doing so.
The six instruments that are the subject of this debate are wide ranging. The hon. Member for Bishop Auckland devoted most of his speech to housing benefits, and so shall I. He referred to problems. I do not complain, because it is the job of the Opposition to oppose. He did not, however, refer to the fact that this year we have significantly increased the upratings.
For example, we are increasing by 33 per cent., from £11·30p to £15, the amount of any lodging allowance paid by the Manpower Services Commission that is ignored in calculating housing benefit. We are increasing the maximum amount of maintenance payments paid by parents to certain students under 25 that can be ignored by 15 per cent., from £18·60p to £21·45p. Now that Labour Members are convinced of that, I do not think that they will divide the House. I hope that pure logic and our actions have won them over.
The other housing benefit set extends transitional arrangements to help local authorities deal with the implementation of the new scheme. The Opposition have prayed against this set to complain about problems and defects in the implementation of housing benefit, yet these regulations provide measures to extend the transitional period to give local authorities a chance to deal with their problems. Labour Members grumble that the transfer has not been done properly, yet when we give more time they grumble just as much.

Mr. Tony Fayell: I introduce myself to the Minister as the hon. Member for Stockport. I can tell him that after some teething problems, the new system in Stockport is working extremely well.

Dr. Boyson: It must be the change of Member. I am delighted not only that has Stockport seen the light politically but that it has introduced housing benefits so smoothly.
When we considered when this scheme should be introduced, we found that an April start was a complex exercise, given the scale and diversity of the changes involved. Last November, 1·5 million people were transferred, and we did not experience the problems that have been outlined tonight — [HON. MEMBERS: "Gabbling."] I am trying to speed up my remarks to give other hon. Members a chance to speak.
We originally hoped to introduce the whole scheme in November last year. The introduction was delayed until April this year, at the request of the Labour party, by the Committee on the Bill. Mrs. Ann Taylor, who was then a Member of the House, moved the motion, which we accepted, that the scheme should come into operation in April 1983. There was no question then about whether it could be done. The Labour party agreed that it was a reasonable time.
Apart from the Scottish authorities, no other local authorities were complaining about the difficulty of introducing what was admittedly a complicated scheme. The move was accepted by all the local authority associations except the Convention of Scottish Local Authorities. We recognised that authorities would need early notification of the regulations and guidance for the new scheme. The main sets were published and in the hands of local authorities in July of last year— nine

months before the start of the scheme. We were, in other words, giving people nine months' notice of how the regulations should be applied. At that time no one suggested that the timetable was unrealistic.

Mr. Jeff Rooker: If that is so, how is it that the Government, in their Supplementary Estimates, under the Consolidated Fund, on page 81, put through an extra £8·3 million due to higher administration cost subsidies than were originally estimated? That sum of £8·3 million took the sum originally allocated from £16·7 million to £25 million — a 50 per cent. increase in administration costs. Yet the Minister says that the local authorities have not had problems.

Dr. Boyson: I wish the hon. Member would listen. I said that at that time nobody was saying that it could not be done. The hon. Gentleman's point is worth developing. As a Government, we guaranteed to cover the administrative costs of the scheme being brought in. When it was found that the authorities needed more money, we did not say that the money was not available. We made the extra money available. The Government could not have done anything more reasonable than they did at that time, and I am grateful to the hon. Member for his intervention.
Hon. Members are properly concerned with individual problems. When something does not work, everyone in every constituency knows that it does not work. If we were to judge questions simply from letters received, we should have to conclude that nothing was working.
Although most authorities had not completed the take-on by 4 April, the great majority of cases were assessed for housing benefit on time. Indeed, for many claimants the take-on of housing benefit has this year been as fast as, if not faster than, the reassessment last year. Certain authorities not only did it quickly, they did it more speedily than previously.
The current position, as I explained yesterday in reply to a question from my hon. Friend the Member for Ravensbourne (Mr. Hunt), is that 95 per cent. of the claimants involved — about 5·5 million households—have now been reassessed.

Mr. Corbett: Have they been paid?

Dr. Boyson: Having been reassessed, we assume that the money has been paid. There may be the odd cases where that has not occurred. As 7 million cases are involved, that may be so. Presumably authorities complain to hon. Members on each side of the House when things are not working. The authorities inform us that 95 per cent. of households have now been reassessed, and that 80 per cent. of local authorities have now completed all their assessments, or will have done so by the end of this month.
We have been criticised for extending the time for transitional payments. We first extended the time by three months, in regard to both sides of the scheme, and there was a further three months' extension on request. We waited to see whether it was necessary. If we had brought in the regulations earlier, they would have been criticised as panic measures. They were brought in when it was obvious that something of that nature had to be applied.
I recognise, and I have recognised from the beginning, that there have been problems. Many hon. Members will know that from their local authorities. Some of these were caused by things that had nothing to do with housing


benefit, for example, the industrial action in the Birmingham and Oxford DHSS, which has had a long-term and knock-on effect. I hope that if my hon. Friend the Member for Derbyshire, South (Mrs. Currie) is called, she will be able to speak about Birmingham.

Mr. Corbett: I now have the privilege to represent the constituency where that dispute started. Will the hon. Gentleman be kind enough to acknowledge that the dispute in the DHSS office in Birmingham—whether he agrees with it—was action by the people employed there to try to improve the service to claimants? He may think that they are misguided, but will he accept that that was the ambition of the dispute?

Dr. Boyson: It strikes me as a strange way to give a better service by going on strike and providing no service. There is a difference of opinion between the two sides of the House on that matter.
Other problems were outside the control of local authorities, such as those with computer packages. A number of authorities, one of which was Liverpool, brought in computers but took a long time to develop them. There was also a problem in certain areas because of the advertisement, on which we spent £350,000 of departmental money between January and March this year so that people would know about the scheme and what was available. We put out a simple leaflet with details about the scheme as well.
As a result, many people who had not known that they could claim these benefits then knew that they could. They went to the local authorities to say that they had not known that they could have a grant but now wanted to apply. Many authorities, instead of developing from the transitional to the long-term, by a normal reassessment, said that priority should be given to the new applicants because of the advertisements. That shows that the scheme was successful, and I am sure that Labour Members would like to know that those who should use the scheme now know that it exists. However, it also increased the problems, and the period of transition was extended.
As to housing benefits, it seems to many hon. Members, and to many outside the House who are not involved in politics, that it is better to have one authority to deal with this than to have two, which means that the claimant does not know whether he is better going to his DHSS or to the local authority. Similarly, money goes to local authorities who are already housing authorities, and the money goes backwards and forwards. In the long term it would be advantageous if this did not happen.
However, rarely does it happen that we make any change in this country — I presume that the same happens in other countries—without there being teething problems.

Mr. Corbett: When the hon. Gentleman makes changes.

Dr. Boyson: I said "we". I might some time include the hon. Member in what we are doing. Whoever brings in schemes, difficulties are always involved, and we hear a great deal about them, and not about the good things.
Let me make it clear what we are voting—or not voting—about tonight. My logic may convince Labour Members. I should be delighted if after my speech they

decide not to vote. I know that they were convinced before of how bad the scheme is. Let us go back to my reply to the question asked by my hon. Friend the Member for Ravensbourne yesterday. I said that about 80 per cent. of the authorities had completed the move to the new system from transition, and 95 per cent. of claimants were being moved over. Tonight, we are giving three months more time to the 20 per cent. of local authorities which have not completed the move, and the 5 per cent. of claimants who have not been transferred. We trust that by the end of September, in one case, and the end of December, in the other, they will all be transferred.

Mr. Frank Field: The Minister suggests that we face a transitional problem and that if we pass the regulations and give local authorities more time, there will be no problem by the end of the summer recess.
Some of us feel that a major part of the problem is that local authorities have felt that they have to cut the number of staff administering the scheme. Will the hon. Gentleman assure us that it was not the Government's intention that that should happen and that authorities that are having, in the Minister's words, teething problems — which means that many of our constituents are not getting their rents — should think about whether they should increase the number of staff running the scheme so that the hon. Gentleman does not have to face a repeat debate after the recess?

Dr. Boyson: The problems will not all be solved when we return from the summer recess. That is why we are proposing a timetable to the end of December in one case. If the problem is solved before then, it will be a bonus.
The hon. Member for Birmingham, Perry Barr (Mr. Rooker) has mentioned the extra money that we have provided for the administration of the scheme. We have met any reasonable request—including one 50 per cent. increase—where staff have been required locally.

Mr. Foster: The Minister said earlier that only 15 authorities were having difficulty. Then he told us that one fifth of them — about 100 authorities — are having difficulty. How does he reconcile those statements?

Dr. Boyson: About 15 authorities have major problems. The rest can solve their problems if they are given a little more time. The list includes Birmingham, Plymouth, Dudley, Enfield, Hull, Scarborough, Brent, Hackney and Lambeth. I trust that the number will be reduced by the time that we have our next debate.
The three sets of regulations on equal treatment, and a commencement order that is not subject to parliamentary procedures, seek to introduce equal treatment for men and women to the family income supplement and supplementary benefit schemes. they alos take an important step forwards more equal treatment as regards entitlement to national insurance benefit dependency increases.
In bringing the changes into effect in November 1983, the Government will fulfil pledges given during the passage of the Social Security Act 1980, and ensure compliance with the European Community directive on equal treatment in social security matters. The principal effect of the family income supplement and supplementary benefit regulations will be to enable either partner of a couple—instead of just the man—to qualify for those benefits, subject to conditions set out in the regulations. The Social Security Act 1980 already contains provision


enabling a married woman to claim a national insurance benefit increase for her husband and children if her husband's earnings are low. The dependency benefit regulations are concerned merely with technical changes.
The Social Security Advisory Committee has given a warm welcone to that package of proposals. We have accepted a number of helpful recommmendations that it made on the detail of the draft regulations. The committee noted that although the changes would be of real benefit, they introduced new complications. We have accepted its recommendations about providing information and advice, and about monitoring arrangements.

Ms. Jo Richardson: Does the Minister agree that two areas of discrimination remain in that package, welcome as it is? One is the non-payment of a pension to married women who are disabled and who the hon. Gentleman is not allowing to claim the housewives noncontributory invalidity pension. The other is his failure to extend the invalid care allowance to married and cohabiting women. If the Minister cannot end such discrimination in these regulations, when will he be able to do so?

Dr. Boyson: We have been considering those matters for some time and I am not surprised that the hon. Lady asked about them. We have to consider whether we are compelled to take action or whether it would be voluntary. We also have to assess the cost—£275 million in one case and £60 million in the other. A lot of money is involved. We must decide what money is available for social security in Britain and where the priorities are. I take the hon. Lady's point and I hope that I have answered it. In addition, we must assess our responsibility in law. I cannot say more than that at present.

Ms. Clare Short: I am sorry that the Minister has not mentioned the 21-hour concession. Whatever the divisions in the House about the causes of unemployment we would all agree that it is right that people who are unemployed and on benefit should at least be given the chance to study. It is clear that the concession is not working well and people are not getting that chance. Will the Minister undertake to review the concession and to publicise it so that at least the unemployed will be able to study during their enforced leisure time?

Dr. Boyson: I take the hon. Lady's point and we shall consider that.
On the earlier point, I must say that it is difficult for us to agree on a measure which would cost £275 million.

Several Hon. Members: rose—

Mr. Deputy Speaker: Order. I remind hon. Members that the debate must finish at 11.30 pm.

11 pm

Ms. Jo Richardson: I am grateful to you for calling me for a few minutes, Mr. Deputy Speaker, so that I can continue the point I made in an intervention in the speech of the Minister for Social Security.
I had not intended to speak on housing benefits, but listening to my hon. Friend the Member for Bishop Auckland (Mr. Foster) and the Minister it is clear that although there are many councils who have not completed the system, and they have been referred to at length, there are also many councils that are not getting it right. That

is the problem. At least, it is the problem for my constituents. I, like others, am bombarded by people who have never been in debt in their life. They come along to me and tell me that they have lived for 40 years in a council house and have never owed a penny rent. Then suddenly the council tells them that they owe £98 and they ask how that can possibly be. The same applies to private tenants, although I have less experience of them. Such troubles will cause not only hardship but embarrassment and humiliation to people. We really should look at that much more closely to ensure that it is eliminated.
I want to speak for a couple of minutes about the two benefits to which I referred when I intervened. I am glad that the Government have taken steps to implement the EC directive on equal treatment. Organisations — women's organisations in particular—and people in the House have campaigned for that for many years. However, it is tremedous blot on the Government's record that they should continue to exclude two groups of women—those who are disabled but married, because the noncontributory invalidity pension applies automatically to married men and to single people whether they he men or women, and married women who have to look after elderly or disabled relatives. That is to penalise a group of people on the grounds that they are married or living with someone. There is still the old-fashioned Victorian assumption that because a person is married, whether disabled or looking after somebody who is disabled, that person will be at home anyway. Life is not like that any more. Women, whether disabled or not, in many cases want to go out to work and they have a right to do so. If they cannot, they have a right to benefit.
The SSAC report, to which the Minister referred, said:
The introduction of equal treatment throughout much of the social security system will render the continuation of discrimination in these two benefits impossible to defend.
Yet the Government go on defending them on the grounds that to do otherwise would cost a lot of money. Admittedly, it would. The Minister has said that it costs £275 million to extend the benefit to disabled married women who at the moment are unable to claim it — about 750,000 married women. The gross cost is £300 million, but the Government have said that they would save £25 million in national insurance and other supplementary benefits, leaving the figure of £275 million.
It is about time we found that money. We cannot permit such discrimination to go on against a group of people who are least able to bear it. Ironically, if one is disabled and helps oneself, one does oneself out of benefit because the doctor says, "You can do your household duties" That is the degrading and humiliating test that is applied to married women.
How many hon. Members have stopped to think what happens to those in society who are carers? I refer to those who are in a job that occupies them for 24 hours a day, seven days a week, and who get no holidays, no sickness benefit and no salary. They are looking after people who may weigh 15 stone and may be incontinent and old. They deal with feeding and laundering, but they get absolutely nothing for it, yet very few women complain. I wish that they would complain more loudly about not being given a little help by the Government.
Benefit in that case would cost not the £275 million we were discussing earlier, but £60 million. I was given that figure in answer to a parliamentary question. The


Government were able to find £8 million just like that to implement the housing benefits regulations. They must look at their accounting more positively to see where money is being ill spent—I do not suggest that it is being ill spent on housing benefits; I can think of many ways in which it is being ill spent—so that priority can be given to those who need it most.
Two such groups of people are those I have mentioned: disabled married women who are forced to stay at home because they cannot work, and able-bodied married and cohabiting women who are forced by society to stay at home to look after elderly and disabled relatives who would otherwise be a charge on the state. It is a disgrace that the measure omits those two groups of people.

Mrs. Edwina Currie: I understand that while I was not in the Chamber the hon. Member for Birmingham, Erdington (Mr. Corbett) referred to an early-day motion that has been tabled by the hon. Member for Birmingham, Perry Barr (Mr. Rooker). I am grateful for this opportunity to put on the record once and for all what happened in Birmingham and to point out that responsibility must be shared by the Conservative administration there, which is still in power, and by the Labour administration, which held power until 1982.
Birmingham is a seesaw authority. In the eight years I have been on the council there have been four different administrations, and the result is always close. When, in May 1982, we won—I admit, somewhat to my surprise — and I became housing chairman—even more to my surprise — we thought hard about our priorities in housing. We decided to go hell for leather for council house sales—we sold 4,000 in 12 months—and for housing repairs, because the mess that Birmingham's council housing was in from the repairs point of view—

Mr. Corbett: Really!

Mrs. Currie: The hon. Gentleman would not have been aware of that; he is a newcomer to Birmingham and was nowhere near the place at the time. The mess our housing was in was an absolute disgrace, and that was entirely the responsibility of the Labour administration.
The chairman of the housing committee at the time, a senior councillor in Erdington, is, I believe, a senior member of the Labour party in the hon. Gentleman's constituency. So if the hon. Member for Erdington wants to do something useful about Birmingham's housing, he might care to sit Councillor McCallion down and find out precisely what he was doing for the two years when he was housing chairman. We can be sure that he was not repairing any Birmingham houses and was not planning for the introduction of housing benefits. When the Conservative-controlled authority came in there was virtually no mention of and no planning for the housing benefits scheme—

Mr. Andrew F. Bennett: rose—

Mrs. Currie: We came into power in May 1982 and it was clear that there had been no planning.

Mr. Rooker: The legislation had not reached the statute book by then.

Mrs. Currie: There were a number of problems with the scheme in Birmingham. I have mentioned the lack of

planning, but 96,000 tenancies were affected by the scheme, perhaps more than in any other authority. There was also the problem of the time scale, which we discussed thoroughly with Ministers. We had to try to get all the tenants organised by November 1982, at a time when the status of many of them was changing. The remainder had to be dealt with by April 1983.
At that time Birmingham's rent account was not computerised. On almost my first day I was shown round the housing department, which is in a great tower block —they go in for them in Birmingham. I met many nice ladies—there were about 90 of them—who were busy writing up the accounts. At that time about 75 per cent. of Birmingham's rental income came in through the national giro. Every week the national giro sent a computer tape to the city and the 90 ladies posted its contents to 136,000 tenants by hand.
I asked the city treasurer when Birmingham's rent accounts were to be computerised and he said that he was not planning to do so until about 1985–86 because the Labour administration had not thought that it was very important. I threw my weight around and I succeeded in bringing forward the programme. We started computerising in December 1982. At the same time we were trying to implement the housing benefits scheme.
All that would have been quite enough to create difficulties but on top of that, egged on by colleagues in the Labour party during the Northfield by-election, the entire social security department of the city—all the officers—went on strike. We could not get anything out of the department.

Mr. Terry Davis: That is not true.

Mrs Currie: My colleague, the Secretary of State for Social Services, who is my right hon. Friend the Member for Sutton Coldfield (Mr. Fowler), will remember that to get quite simple pension cases sorted out I had to go direct to him. I could not get through to the social security department.

Mr. Rooker: On a point of order, Mr. Deputy Speaker. The staff of the social security office in my constituency did not go on strike. I ask the hon. Lady to withdraw the slanderous attack that she has made on it.

Mr. Deputy Speaker: The hon. Member for Derbyshire, South (Mrs. Currie) must be responsible for her own speech.

Mrs. Currie: Even if the staff in the social security department had not gone on strike, the DHSS in Birmingham was—I believe that it still is—six months behind.
In April 1982, thanks to the Government's action, the city's rates were reduced. That happened because the west midlands transport levy was declared illegal. In October 1983 I increased the rents to raise a great deal more money for council house repairs. In April 1983 the city council reduced the rates.
In addition to our problems, we had the private tenants. It was probably the private tenants who caused nearly all of us to go grey. We thought that there were nearly 30,000 private tenants but that had to be something of a guess. There was no good reason why the city council's housing authority should have had records of private tenants.

Mr. Corbett: What is the census for?

Mrs. Currie: They would have teen on the records only if they were on the housing lists at the time. Account had also to be taken of lodgers, houses in multiple accupation and the one or two illegal tenants who were not terribly happy about disclosing themselves. When everything was put together, we were confronted with a mammoth task. I am deeply grateful to the Government for allowing the timetable to be extended.

Mr. Foster: rose—

Mrs. Currie: No, I shall not give way. Opposition Members have been having a go at me and it is my turn now. There was some hassle about whether the date of the first implementation should be 15 or 22 November. With hindsight I feel that a big authority such as Birmingham should have sorted that out in advance. I make no apology for having, perhaps, been a little preoccupied with other things at the time.
I ensured that we repaired the flat roofs on the many blocks of flats in the city and that we installed entry phones in all the 429 tower blocks, whereas the Labour housing chairman had spent his time answering petitions about them but had not installed them. One of the results was that it was hard for Labour canvassers to, get into the tower blocks during the May elections.
We also had a programme, which is continuing, to repair the 625 lifts in those tower blocks. We developed and expanded the enveloping scheme and used the capital receipts from the sale of council houses to increase the housing investment programme from the £41 million spent by Labour in 1981–82 to £60 million last year and £128 million this year. They must be major benefits for all Birmingham council tenants.
Some of the details of the legislation, as I suspect happens with all legislation, created difficulties for those who had to carry it out. I suspect that, no matter who is sitting on the Front Bench it is always easier to write the legislation than to try to make it work. Many of the problems are being improved by these instruments.
The measures contains first-class objectives which must benefit all tenants. Before the legislation was introduced rent arrears in Birmingham were running at £10 million —about 7 per cent. of the rent roll. Tae figure was 25 per cent. 30 per cent. or even 50 per cent. of the rent roll of other local authorities. I fail to see how such interruptions to the cash flow can help.
The legislation and these changes will save time and public money, which we should not waste. They will avoid many evictions. I have experience of the social services and have always hated evicting a family for rent arrears. These proposals will improve local authorities' cash flow substantially. The tenants will benefit. I therefore welcome and support the Government's action.

Mr. Terry Davis: I wish to begin by referring to statutory instrument No. 1,000 and especially to regulation 5(3) which deals with the recovery of interim payments, and, as I understand it, arises directly from the dispute that took place in Birmingham social security offices about a year ago.
I wish to make only two comments about that strike. First, I must refer to the comment made by the Minister of State. He said that going on strike was a funny way to improve the service and thus provide no service at all. I

regard that comment as ignorant and ill informed. He was not Minister then and can be forgiven for not knowing how and why that strike happened. However, he should have talked to his predecessor and the Under-Secretary, who is sitting next to him, and they should have briefed him before he came to this debate on why the strike took place.
Secondly, the hon. Member for Derbyshire, South (Mrs. Currie) said that Labour Members of Parliament egged on the social security staff to strike — she is nodding now —but that statement is not true. If she would take the trouble to speak to those of her hon. Friends who were Ministers then and who are still Ministers, they will tell her that Labour Members played a constructive role, did not exploit the situation and did not egg on the staff in social security offices to strike. In particular, it is a slur on the record of Julius Silverman, in whose constituency the strike began, to suggest that he egged on people. On behalf of my hon. Friends I resent those remarks.
However the strike did take place and had a serious effect on many people in Birmingham. People were paid a flat rate of emergency payments which did not take account of their circumstances. At the time they were asked to sign undertakings that the money could be recovered from their supplementary benefit when the dispute ended. Those people had no alternative. They had to sign the undertaking or they would have received no money. Now the money is being deducted from their supplementary benefit, which both sides of the House will agree does not provide a rich living or high income. Those people will have deductions made week after week, month after month and in some cases for years.
I should like to know from the Minister on what authority those deductions are being made. My hon. Friends and I have examined the present regulations, which existed when the undertakings were signed. We are not convinced that the Government have the legal right to make those deductions from the supplementary benefit of our constituents. What is the legal authority? Statutory Instrument No. 1000 comes into effect on 15 August. It is designed to cater for future disputes in the DHSS. What is the legal authority for making deductions from payments that were made on an emergency basis during the dispute in Birmingham from November 1982 to March 1983?
Second, I want to know why the DHSS is failing to follow its own procedure for the recovery of money from people who have been overpaid. I have evidence that the Ministers can have if they wish—or they can obtain it from agencies in the city of Birmingham. It is that the DHSS is not notifying people of the amount of calculated overpayment or of their appeal rights, and it is not discussing with people the arrangements for recovery. It is simply imposing an arbitrary deduction from people's supplementary benefit.
The Minister may say, "So what. The staff at the social security office will not demand too much." However, I have known occasions when people have been asked to repay money that they have already repaid. The DHSS in Birmingham is in chaos. The social security offices are inefficient to an extent that only pales into insignificance when compared with the city housing department. I repeat that people are being asked to repay money that they have already repaid. They have no evidence for the payment, but later the social security office admits that it has found the records showing that the people had already repaid the money that it had intended to deduct from their


supplementary benefit week by week. That is appalling. If the Government cared at all for people in that situation, through no fault of their own, they would have written off the amount of money involved.
People's housing is also being affected. The delay in calculating the amount of arrears of benefit that people are entitled to receive is exacerbated by the delay in checking whether they received emergency payment. That means that people are not receiving their arrears of supplementary benefit and that their rents are not being paid. The city housing department, under Conservative control, is busy sending out possession orders, taking people to court and obtaining possession of their homes for rent arrears that are entirely due to the social security strike of 1982.

Dr. Boyson: On a point of fact, I am informed that the provisions enabling interim payments to be deemed to be payments of supplementary benefit that can be reclaimed in this way are under the Supplementary Benefit Act 1976 —the regulations on the determination of claims. I shall write to the hon. Gentleman with more information.

Mr. Davis: It was not supplementary benefit. It was an extra-statutory payment. That was made clear at the time. We shall debate this in future.
Now I refer to housing benefits. The city housing department is not only taking out possession orders against people who owe rent because they have not had their supplementary benefit, but also seeking to possess people's homes because it has not yet credited their rent accounts with the housing benefit to which they are entitled. I can give examples to Ministers, if they wish to hear them.
Statutory instrument No. 912 is an admission of failure. It was agreed on both sides of the House that a reasonable period of time was being allowed for implementation of housing benefit. It was indeed reasonable, except for the city of Birmingham housing department, which was already in chaos. It was already taking three months to deal with rebate applications. The hon. Lady did not mention that. The department was already in arrears and should have told the Government that it could not meet the timetable. April was an unreasonable date for Birmingham. The hon. Member for Derby, South tried to blame the Labour council up to May 1982. The fact is that this—

Mrs. Currie: It is Derbyshire, South.

Mr. Davis: The hon. Member for Derbyshire, South is trying to blame the Labour council up to May 1982. The Act had not been passed in May 1982. The hon. Lady is really stretching things when she tries to blame the Labour council.
Then the hon. Lady said that the city of Birmingham was so large, with 96,000 tenants, that the timetable would not be met. What she is really saying is that the city of Birmingham is too large for the Conservative party or her to administer.
We want to know whether another three months is enough. Will the city of Birmingham have straightened out the problem by 30 September? What will happen if it has not? The House will be in recess. When we return, will the Government introduce another statutory instrument to correct retrospectively what failed to happen in October?

The truth is that the implementation of housing benefit in the city of Birmingham shows that the combination of a Conservative Government and a Conservative council means misery for hundreds of Birmingham people.

Mr. Robert McCrindle: Having listened to a tirade against the housing benefits system from at least two Labour Members, I shall speak in favour of it. A large part of the country has moved towards that system with the minimum of difficulty. It is easy for the Opposition to fasten on to those local authorities which have experienced difficulties. The Government should be congratulated, not vilified, on having embarked upon such a major undertaking as housing benefits with so few difficulties. What has characterised the introduction of housing benefits more than anything else is the smooth transition towards the new system.
I have no way of knowing whether my constituency is typical, but with several thousand council houses and several thousand privately rented houses within it I have received very few complaints. The system has moved forward much more smoothly than anyone might reasonably have expected. Of course there have been problems, but the scheme, after a relative short time in operation, has far fewer detractors outside the House than it seems to have within it.
More problems have arisen in the private rented sector than in the council house sector. Perhaps that was to be expected. Although I speak with no knowledge of Birmingham, the problems that have occurred in my constituency have been fairly minimal. I believe that once the initial difficulties, which might well have been anticipated, have been overcome, we shall look back and wonder why we took so long to move to this system of housing benefits. The removal of one tier of administration must eventually lead to a simplification rather than a complication of the system. I do not deny that there will be complications until the system is fully bedded down and I have no doubt that the Government are right to extend the time scale within which the complications can be sorted out.
The hon. Member for Bishop Auckland (Mr. Foster) implied not only that there have been difficulties and complexities in introducing the system but that they will continue for ever. I do not accept that. I believe that once the whole thing is bedded down it will prove to have been one of the better moves introduced by the Government.
Therefore, it is wise to extend the transitional provisions. It may be said with hindsight that the Government were marginally more optimistic than they were entitled to be about the time within which the changes could be made, but I am certain that the system is moving in the right direction. It has thrown up far fewer complications than one might have feared. There have been few complaints and I expect very few in the future.
I commend the Government for having introduced the housing benefit system and I believe that they are right to persevere with it and to extend the transitional period as they propose.

Dr. Oonagh McDonald: Mr. Deputy Speaker, I—

It being half-past Eleven o'clock, MR. DEPUTY SPEAKER put the Question, pursuant io order this day.

Question negatived.

Cyprus

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boscawen.]

Mr. Cyril D. Townsend: I welcome this early opportunity in the new Parliament to draw the attention of the House to Cyprus, in a week when the President of Cyprus and his Foreign Minister, Mr. Rolandis, are in London for important talks with our Prime Minister and Foreign Secretary.
I raised the Cyprus tragedy in an Adjournment debate in August 1975, a few months after first entering the House, and again in December 1981. The passing years have brought little joy and all too much suffering and misfortune to that remarkably beautiful Mediterranean island, well known to so many British people.
My purpose today is not to cheer on one side or the other but to cheer on the people of Cyprus in their determined struggle for a just, honourable and lasting settlement and our newly re-elected Government in their attempts to facilitate such a settlement.
Britain's ties with Cyprus go back to 1879. Cyprus is a fellow member of the Commonwealth and of the Council of Europe. There are more Cypriots in London tonight than in Nicosia.
Britain is one of the three guarantor powers. The last governor of Cyprus, Lord Caradon, whom I guarded for a short time at Government House, said in the other place:
We see that lovely island now cut in two, when we the British undertook—I do not forget that I signed the treaty myself on behalf of Her Majesty's Government—that the island would never be divided. We have failed to live up to a clear responsibility and, month by month, year by year, we see discussions going on and leading nowhere. We have a responsibility; we gave our undertaking, and we have utterly failed to carry it out."—[Official Report, House of Lords, 23 June 1983; Vol. 443, c. 66.]
I agree with those words. I agree that my country has failed in its special moral commitment. I agree that we have left undone those things that ought to have been done, particularly following the coup of 15 July 1974.
We should not, in this brief debate, give ourselves to recriminations and repetitions of actions with which we are only too familiar. It is sufficient to recall that, following the arrival of Nicos Sampson as President of Cyprus, Turkey invaded Cyprus and that some 40 per cent. of the total territory of the republic of Cyprus still remains under Turkish military occupation.
The area occupied happened to contain 60 per cent. of the agricultural land, 90 per cent. of the tourist accommodation, 83 per cent. of the cargo-handling capacity and 55 per cent. of the mines. Yet in 1974 Turkish Cypriots represented only 18 per cent. of the population.
In the international community's view, the occupation is the first and most obvious barrier to a free and independent Cyprus. The plight of the refugees is well known to hon. Members. The 200,000 Greek Cypriot refugees, including 50,000 children, represent 40 per cent. of the Greek Cypriot population. The Government and people in Cyprus did a wonderful job in looking after such numbers.
On my most recent visit to Cyprus last September, as vice chairman of Friends of Cyprus, I spoke to many refugees. They reminded me that they are still prevented by force from returning to their homes, businesses and


farms. Many elderly refugees fear that they will never see their villages again, although they were born and brought up there.

Mr. Jim Spicer: My hon. Friend has mentioned the regime which is abhorrent to all hon. Members. What steps should have been taken to remove the leader, and did the British Government at the time, as the guarantor power, take the necessary steps? If they did not, what should have been done other than by way of the Turkish intervention which, in my view, was inevitable?

Mr. Townsend: I must resist my hon. Friend's invitation. I should like to go into the issue in detail later. The question of the so-called missing people has not been cleared up. The wives, lovers, mothers and fathers of the missing soldiers have a right to know whether they are alive or officially dead.
In its resolution dated 8 December 1982, the third Committee of the United Nations General Assembly stressed the need for
a speedy resolution of this humanitarian problem.
That resolution was supported by all members of the European Community except Britain, which abstained. The European Parliament also passed a resolution on the subject on 11 January 1983. The Turkish authorities have been settling farming families from Anatolia and former Turkish soldiers in the north. Altering the demographic structure of Cyprus in this way must be condemned without reservation by the Secretary of State.
What action have the Government taken to try to get the Turkish authorities to scale down their occupying forces which are still about 20,000 strong? I learnt tonight that they have been deploying the newest American tanks in a NATO role in the north of Cyprus.
All British Governments have appreciated the Turkish contribution. NATO is crucial, but it has led to a tendency in the Foreign Office to play down Britain's obligations to Cyprus and to take a step back. I think that Turkey will remain in the alliance for many years, but it will remain only as long as it is in its defence interests to do so. To secure NATO's south-eastern flank it is necessary to have a settlement in Cyprus. Sometimes Conservative Ministers overlook that basic fact.
We all put our faith in inter-communal talks. The Secretary-General's special representative, Hugo Gobbi, started by expressing satisfaction about the good atmosphere. Discussions began on reaching agreement on a resettlement under United Nations auspices and on practical measures by both sides to promote good will and confidence. Accompanied by the hon. Member for Oldham, Central and Royton (Mr. Lamond) in talks with political leaders on both sides of the green line, I found general agreement that a revived federal constitution is required. Fixing the size of the northern region would be formidable but not impossible. I stress that the Turkish community must be given security. It has a right to it. As with the Palestinian question, security is the key.
I regret that it is now obvious that no further progress can be expected in the inter-communal talks as there is no real dialogue between north and south. All of my hon. Friends will wish the Secretary-General well in the new initiative that he has undertaken. We know that he has first hand practical experience of Cyprus.
My right hon. and hon. Friends want to hear from the Minister what Britain will do in the future to meet her obligations as a guarantor power. We recognise that a settlement cannot be imposed, but propositions which neither side would have proposed but which both sides can accept can be put forward. We recognise that the weight of world opinion must be brought to bear. We recognise also that the President of the United States will have to put his great country's reputation behind the thrust for a settlement. My conviction over the years has been that the European Community has a key role to play in the eastern Mediterranean.
What happens if the Secretary-General's missions fail? I would welcome the dispatch in due course of three statesmen of world repute to Cyprus to meet both sides and to put forward, in private, proposals for bringing the two communities together. My hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi), whom I am pleased to see here, has suggested that a High Court judge who specialises in constitutional affairs should be lent to Cyprus.
Let us hear from the Minister how we might best discharge the commitment that we rightly undertook—under a Conservative Government. That is what many lovers of Cyprus at home and abroad are looking for in tomorrow's Hansard and press reports. It is unthinkable that we should do nothing. That would be quite unworthy of a Government of this calibre. It would also be quite unworthy of the British people who do not intend to allow a Commonwealth country to fall by the wayside.
Friends of Cyprus has been organising meetings of professional Greek and Turkish Cypriots, but there is a danger that, as the years go by, the two communities will grow apart. As an independent organisation, Friends of Cyprus is well qualified to call such meetings. The Government, the diplomats and the agencies also have a role to play. How will that role be played in the next few years? Has not the time come for the new Foreign Secretary to make a personal visit to Cyprus to acquaint himself with the places, politics and personalities? I hope that Baroness Young who has specific responsibility for Cyprus, will make a visit beforehand. I understand that her predecessor never made an official visit. Indeed, since 1979, Foreign Office Ministers have noticeably avoided visiting Cyprus and four different Ministers have been responsible for Cyprus in four years. Not one of them has been in the job long enough to become an expert.
No doubt the Foreign Office will deny that there has been a scaling down of interest in Cyprus. Why, then, has Cyprus been left out of Gracious Speeches since May 1979, although it was included in those of 1975 and 1976? This year, Gibraltar and Hong Kong were mentioned, but not Cyprus. Last year, Iran-Iraq was mentioned—a war in which we have no responsibility and all too little influence—but there was no mention of Cyprus.
Once again, Mr. Denktash has threatened UDI. That would be fatal. What are the Government doing to persuade him to think along more constructive and positive lines? Is it true that our able high commissioner, Mr. Wilberforce, and the United States ambassador in Cyprus recently called on Mr. Denktash to try to persuade him against such a proposal?
Will the Government keep up the pressure on the Turkish authorities to settle quickly once and for all outstanding claims by British citizens whose property was taken over by the Turkish forces? I hope that my hon.


Friend will take this opportunity to explain to the House why the United Kingdom abstained on resolution 253 at the General Assembly a few weeks ago, while countries such as Australia, France, Greece, Ireland and New Zealand supported it. Sir John Thomson told the assembly:
There are certain elements in it which we support.
Perhaps we could learn tonight which elements we could not support. The resolution demanded the immediate and effective implementation of resolution 3212, which was supported initially by 117 nations, including Greece, Turkey and Cyprus.
One issue that I raised in 1981—students' fees—has been satisfactorily advanced. Following an excellent report by the Overseas Students Trust, Cyprus was one of three countries to be offered exceptional treatment. The sum of £1 million a year was allocated for each of the next three years to assist students from Cyprus. This was welcomed, although some of us wished the Government to go further and to offer Cypriot students something much closer to home student status. I urge the Government to continue to support the education of students from both parts of Cyprus, where there is no university.
A mountainous island of 3,572 square miles is far too small to be permanently divided. In economic, industrial and agricultural terms, Cyprus must be regarded as one unit. Following the re-election of President Kyprianou, whom I had the pleasure of meeting this evening, and the United Nations debate, this is a so-called period of opportunity which must not be missed if we are to prevent increased tension both on the island and between Greece and Turkey.
Having closely followed the Cyprus issue for many years, and having met the leading politicians on both sides of the dispute last year in Cyprus, I am convinced that the vast majority of Cypriots want a permanent settlement that will guarantee their security and prosperity. The evidence of the past 100 years is that Greek Cypriots and Turkish Cypriots, although very different in character and temperament, share a love of Cyprus and can live and work peacefully together. The interests of Greece and especially Turkey in the island's future mean that Cypriots cannot resolve the problems on their own. The international community must deal with the international aspects of the problem.
I call upon the Government to give a lead to the international community, and to strain every sinew in the search for a magnanimous and lasting settlement. Let us have courage, offer hope, and bring peace to a troubled Cyprus.

The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Ray Whitney): As my hon. Friend the Member for Bexleyheath (Mr. Townsend) rightly said, he has closely followed the affairs of Cyprus for many years. During that time, and in the process, he has earned a good reputation as a friend of the people of Cyprus, a reputation that he certainly enhanced by his remarks this evening. I congratulate him on his good fortune in securing this debate, and thank him for the opportunity that it gives to the House to explore this difficult matter. The interest that has been shown by Conservative Members and the many views that exist, suggest that we must continue to examine the matter positively in the House and in any other forum that is available to us.
I am happy to agree with my hon. Friend's comment that this is not the time, and it would not be profitable, to enter into recriminations about the past. It is important to understand the issue, and to know the facts that have led to the present problems and the depth of bitterness in the two communities. It is also important not to become ensnared in a consideration of the past. We must take careful account of those problems and the present difficulties, but, as my hon. Friend said, we must build for the future.

Mr. Jim Spicer: I could not agree more that we should not look to the past, but will my hon. Friend confirm one fact? Did not the Turkish intervention in 1974 come after extreme provocation and after the Turkish Foreign Minister had come here and asked the Government, as a guarantor power, to intervene, as they had a right to do? He begged us to act. It was only after the Government had refused to intervene in a way that they had a right to do that the Turkish intervention took place.

Mr. Whitley: We would do better to start from the present and move forward.

Mr. Spicer: I agree.

Mr. Whitley: Recriminations and post mortems about the past will not carry us much further forward. It is important to consider just the events of the past year and those since the time of the last Adjournment debate of my hon. Friend the Member for Bexleyheath in December 1981. That was timely, as it came just after the Secretary General of the United Nations, Dr. Waldheim, had launched his own evaluation. Over the following year or so, the communities discussed that evaluation through the intercommunal talks held under the auspices of the United Nations under the chairmanship of the United Nations representative, Dr. Gobbi, in Nicosia.
As my noble Friend Lord Belstead said in another place on 20 April, it could not be claimed that there was dramatic progress during that period, but it is important to recognise that that discussion was the most thorough analysis of a future Cyprus constitution that has ever been undertaken by the two communities since Cyprus became independent and the original 1960 arrangement broke down. This should have provided—we believe still can provide—an excellent basis on which to build for the future.
Sadly, since the beginning of this year, there have been few meetings of the two communities through the intercommunal talks. No talking has inevitably meant very little progress. We greatly regret that, not least because the atmosphere at the intercommunal talks was good, and discussions had been proceeding well, particularly after a decision taken just over a year ago to speed up the frequency of the talks. They were adjourned in the first place for the Cyprus presidential elections. That was unavoidable, as it had always been the practice of the two communities to adjourn the talks at such times.
After only a few more meetings, the talks were adjourned once again for the United Nations debate on Cyprus in May, and although it is now well over two months since that debate ended, the talks have not yet been resumed.
My hon. Friend has asked on more than one occasion about Britain's abstention in the United Nations vote on 2 May. Let me first make it clear that the British


Government believe fundamentally that the United Nations' efforts are central to any possible solution of the Cyprus problem. That is an essential principle of our approach. Another principle, as my noble Friend Lord Belstead also said, is that all the parties at the United Nations should ask whether their actions would bring a Cyprus settlement any nearer or whether they would push it further away. That is an absolutely vital criterion, and I assure the House that we shall always judge our own actions against that criterion.
The British Government decided to instruct our permanent representative at the United Nations to abstain on the United Nations vote precisely because we did not believe that the resolution, as it was tabled, would help to bring a solution to the Cyprus problem any nearer. While there were elements in the resolution which were positive, it was also felt by the Government that there were a number of elements in it which were unhelpful and which prevented us from voting for it as a whole.
I suggest to my hon. Friend that what cannot be denied is that the immediate consequence of the United Nations resolution has been that the intercommunal talks, which were scheduled to resume on 31 May, have not yet done so. Rather than argue about who is responsible for the present state of affairs, we should, as I think my hon. Friend is prepared to agree, look forward to seeing how we can deal with it.
Just as we are concerned at the failure to resume the intercommunal talks, we are also concerned at the talk that there has recently been in northern Cyprus of the possible declaration of an independent Turkish-Cypriot state. Once again, I do not think that it is particularly fruitful to argue about why that state of affairs has come to be discussed. Her Majesty's Government have been following the developments in northern Cyprus with the greatest of care.
Our latest information is that a Bill enabling the holding of a referendum in northern Cyprus has been tabled in the Turkish-Cypriot Assembly, but that Assembly has now gone into recess until October. Therefore, we hope that the immediate prospect of a declaration of independence, or a referendum about it, has receded. We believe that such a declaration would ruin the prospects for intercommunal talks.
Sadly, it seems likely to be true that when we think of a way forward we must take account of the fact that every year that passes may make it much more difficult to achieve a settlement. Most of us would agree on that. The great danger at the moment in Cyprus is that we shall bring about a fossilisation of the present situation. There is, indeed, a real risk of complacency. For the moment, thank goodness, there is no intercommunal violence. In the past

nine years there has been only one fatal intercommunal casualty. But we have to ask ourselves, as we are tonight, whether that can continue. My hon. Friend is right to make us consider that question.
There is the underlying problem, which gets worse as two new generations grow up on either side of the green line who do not know each other. As the years pass, there is virtually no contact between the two sides.
Cyprus is in a vicious circle which we must break. In view of the time, obviously I cannot deal now with a number of the points that my hon. Friend the Member for Bexleyheath has raised. I assure him that we support the United Nations Secretary-General to the hilt. That support is unwavering. We stand ready to do anything that he might consider helpful.
As we all know, the Secretary-General, Mr Perez de Cuellar, is deeply experienced in the Cyprus issue and has been specially commissioned, as part of the resolution, to become involved in the search for a solution to the Cyprus problem. His international stature and his great detailed personal knowledge, and the influence of his great office, will, we believe, give him the best chance that exists to find a solution. At the same time, we remain in constant touch with interested Governments. President Kyprianou is at the moment in London. He has had talks with my right hon. Friend the Prime Minister, and with my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs. He will also be meeting my noble Friend Baroness Young. I had the privilege tonight of greeting the Turkish Foreign Minister, who has arrived in London, and we shall make points to him similar to those that we made to the Turkish Cypriot community about flexibility and imagination on both sides.
I shall study carefully the points made both by my hon. Friend the Member for Bexleyheath and by other hon. Friends who have intervened, and shall consider whether other points can be developed by the British Government. At the moment it is crucial that we continue to support the United Nations initiative, and a separate initiative at this juncture by the British Government would not serve any useful purpose. The important thing is to throw our weight behind the United Nations' initiative. It is also important that the maximum flexibility, imagination and political courage should be shown by the two communities in Cyprus and by their leaders. I hope that all my hon. Friends who know Cyprus so well, and so much better than I do at the moment, will use their influence with the communities to ensure that those flexible attitudes are reflected and are brought to bear on the intercommunal talks
Question put and agreed to.
Adjourned accordingly at one minute to Twelve midnight.